ECONOMY

Sotheby’s Sees An Urgency Among India’s Wealthy To Buy Luxury Homes

The luxury housing consultant’s India team comprises former bankers with global background. They mostly focused on offline events to connect with prospective buyers and sellers prior to the pandemic. Now, 75% of that happens via digital engagements, with the rest through social media and print advertising, according to Goyal.

Sotheby’s biggest asset is the network of 24,000 agents in 75 countries. That allows it to reach non-residents looking to buy property in India, and Indians seeking homes overseas. Sotheby also offers a white glove service that includes wealth advisory, drawing on the expertise of its parent and trusted law firms. “That way,” Goyal said, “Our clients become our brand ambassadors and they refer us to their friends and families.”

India’s Real Estate Regulation Act caps broker fees at 2% of the property value that can be charged from buyers. Premium realtors such as Sotheby, however, earn from the seller as well by offering a bouquet of services.

“Our transaction fee depends on the size of the transaction and the value-adds he or she picks from our advisory services,” Goyal said in the email. “And the fee varies with micro-markets and types of property.”

He, however, declined to reveal the total value of properties that the consultant has sold to Indian clients in the last seven years.

In Demand: Lutyens’ Delhi To Peddar Road In Mumbai

Scions of the business families now look for luxury properties within and outside the country, according to Goyal. Earlier, people with Rs 1,000-2,000-crore wealth, were happy to stay in their ancestral homes, he said. “But the new generation has aspirations to buy larger homes and are willing to spend Rs 100 crore to Rs 150 crore.”

Successful professionals like lawyers and doctors is the second category of buyers. And Sotheby’s has also seen the trend of startup owners buying luxury homes.

Founders of newbie ventures have started acquiring luxury homes after equity funding, Goyal said. An infusion of big money results in capital gains and buying a home can help cut tax outgo, he said.

Within India, Sotheby has seen demand for homes in cities such as Delhi, Mumbai, Goa, Kolkata, Alibaug and in hill stations like Kasauli and Rishikesh, Goyal said. Well-travelled buyers who have experienced luxury overseas look for bungalow-style spacious villas, with large green spaces surrounding the property, well-kept lawns, and sometimes even a private pool in India.

And Sotheby’s clients seek an address in the most coveted neighbourhoods, like Jorbagh in Delhi, Alipore In Kolkata, or Anjuna or Parra in North Goa.

In the nation capital, someone buying a bungalow in Lutyens’ zone is more about the proximity to places like the India International Centre, Lodhi Garden, and Delhi Golf Club and the kind of gentry you have as your neighbours, Goyal said. The other reason are amenities in the area including elite schools to golf courses.

Demand from well-known lawyers is strong in Delhi because of the Supreme Court. While in Gurgaon and Bengaluru, startup founders are its biggest clients.

South Mumbai destinations in demand include Carmichael Road, Peddar Road, followed by Bandra and Juhu waterfront properties. Parel, Worli and Bandra-Kurla Complex are the other emerging hotspots for the ultra-rich.

Another trend that Sotheby has seen take off in the last seven years is buyers looking for holiday homes within drivable distance of the city. And then there is a new breed of Indians looking to buy overseas.

“Hundreds of our clients from Delhi and Mumbai own properties in Singapore, Dubai, New York, London, etc.,” Goyal said. Partly because their children are pursuing education in cities abroad and also because many want to settle overseas, he said.

NRIs Are Consolidating

One reason why more Indians are seen buying foreign properties is because non-resident Indians were looking to exit from the nation’s property markets in the last five years. Goyal cited stagnant prices in the last eight to 10 years, stalled under-construction projects and depreciation of the rupee.

In some cases, the NRIs have chosen to repatriate money to buy property in other global gateway cities, he said. “And if they have strong ties to India with family and visit frequently, we help them consolidate into one larger and better-quality property in a marque zip code.”

What’s also helping buyers make decisions with confidence is that India’s organised property consulting service market is growing. “Earlier, it was the local broker doing most of the deals,” Goyal said. “Professionals have made the market more transparent.”

Goyal is certain that demand for luxury homes will soar as the nation keeps minting new dollar millionaires and billionaires. “As more and more Indians are going global, most corporations are going multinational, this opportunity is getting bigger.”

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