A newly launched luxury residential project in Gurugram witnessed a strong response, possibly on pent-up demand due to limited recent supply and a tax tweak in the recent Budget.
Named The Arbour, the project in Gurugram, Sector-63 has over 1,100 units across 4 BHKs in five towers. Though not all units have been opened for sale, each apartment costs around Rs 7-9 crore, making it a super-premium project.
Each flat has about 4,000 sq. ft. of saleable area, which equates to about 4.4 million sq. ft. of saleable area.
“A luxury property consultant from Gurugram said unexpected competitive pricing by DLF also led to the rush.”
“A photo of a crowd of potential buyers jostling to book apartments costing upwards of Rs 7 crore each has brought the spotlight on the demand for luxury homes in India. It’s a new premium project in Gurugram by DLF Ltd., which opened bookings recently. But, sector analysts and brokers attribute the suggested rush to a combination of pent-up demand, a tax tweak in the budget and an inaugural discount.
Named ‘The Arbour’, the project in Sector-63, when ready, will have over 1,100 units of four-bedroom apartments in five towers. Each home, costing around Rs 7-9 crore, has about 4,000 sq. ft. of saleable area. The construction has begun. The project has a total potential sale value of Rs 8,000-9,000 crore for the company and it has already received “strong initial interest”, said Adhidev Chattopadhyay, research analyst at ICICI Securities..” Our channel checks indicate significant buyer interest from customers for the project,” Chattopadhyay wrote in a note. “Depending on customer interest for specific inventory, the company may look to sell the entire inventory on launch or hold back inventory with an intent to achieve higher pricing. ” Higher-than-expected sales bookings at the Gurugram launch prompted Chattopadhyay to raise FY23 and FY24 residential sales estimates for DLF by 17% each to Rs 10,300 crore and Rs 10,680 crore, respectively.
Property consultant Anarock cited the lack of new launches for the demand. Fresh supply of luxury residences dropped 20%–from 31,700 units in 2021 to nearly 25,360 units in 2022, it said. “Ever since the pandemic and overall slowdown in the NCR market in the last few years, we have seen developers restrict new supply in general,” said Anuj Puri, chairman of real estate consultancy Anarock.”Amid this restricted new supply in the region and a strong momentum in the luxury category, a project launch by a large and listed developer is gaining much traction,” he said. “Also, this segment of homebuyers is least impacted by the pandemic. “Uri also attributed the rush to a tax change in the budget for 2023-24. Deduction on capital gains on investment in residential houses has been capped at Rs 10 crore, which can be a negative for this segment as previously there was no such cap. “This essentially means that if one sells a house, and gains are more than Rs 10 crore, then the maximum benefit they can avail is up to Rs 10 crore when invested in another property,” Puri said. “Capital gains of over Rs 10 crore will now be taxed. This provision itself must have prompted many to come forward and close a deal before the current financial year ends.”. Udit Bhandari, owner of luxury property consultant Gurugram Deals, said unexpectedly competitive pricing by DLF also led to the rush. “The expected per square foot price was about Rs 20,000-23,000,” he said. “But DLF came out with an inaugural, special two-day price of Rs 17,500.”DLF had been accepting expressions of interest for this project since October, he said. “Since the rates were dropped, a lot of EOIs held on and didn’t withdraw. There was a rush of new buyers who liked the new price.” According to Bhandari, the aggressive pricing by DLF could be to pull customers away from M3M India Pvt. “M3M has a property called Smart World very close to DLF’s property. And it has also become an aggressive player in the region. So, the pricing is a competitive move and could be a result of some sort of rivalry between the two. “As a channel partner, Bhandari said, his firm put in eight expressions of interest for clients, but only four managed to get allotments, while four are still waiting.
Overall demand for luxury homes has also made a “spectacular return post Covid”, according to Knight Frank. “The HNIs (high-net-worth individuals) have given a new lease of life to the luxury apartment segment which was languishing for over half a decade,” said Gulam Zia, senior executive director at Knight Frank India. “With most of the inventory from dependable sellers almost exhausted, it’s only natural that an offering from someone like DLF would be lapped up. But the pace at which 1,200 apartments found suitors within three days has surprised even the most optimistic realty experts.”
