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Sep 20, 2013, 04.06 PM IST | Source: Jones Lang LaSalle

The homes of India's super rich

India is reeling under the continued onslaught of inflation, petrol price hikes and generalized insecurity about where the economy is headed.

By Anuj Puri, Chairman & Country Head, Jones Lang LaSalle India

India is reeling under the continued onslaught of inflation, petrol price hikes and generalized insecurity about where the economy is headed. Against all expectations, property prices in our metros have held firm and even show signs of upward movement. While the man on the street continues to wonder when he will be able to buy a modest home of his own, India's super-rich are raising palatial homes at truly astronomical expense.
 

Antilia, Mukesh Ambani's 27-floor fortress at Altamount Road in South Mumbai, is already being talked of as the most expensive home in the world. Vijay Mallya has levelled his 4.5 acre ancestral home on Vittal Mallya Road in Bangalore to make way for the 82-apartment 'White House', in which he will be occupying an acre-sized 'palace penthouse' on the 33rd and 34th floors.

 

WHAT LIES BENEATH

On the surface, India's super-rich appear to operate in an entirely separate dimension which has no overlap at all with the 'real' world. There is certainly an element of truth in this - wealth tends to beget more wealth, and at some point a perpetual motion machine grinds into motion - a cycle of money generation which vibrates on a rather unique frequency. The question is - does this frequency broadcast an ever - widening social divide? Not quite.

There are more elements to these super-homes than meets the eye. The trend of India's extremely high networth individuals building palatial homes needs to be viewed from various angles. Of course, it is to a great extent a lifestyle statement that broadcasts the fact that the individual and his family have 'arrived' and should be numbered among the country's wealthiest and most influential people. This statement alone brings inalienable social benefits with it.

Fundamentally, these palaces serve the same purpose that the homes of other affluent people do. At the same time, they also encompass a number of practical functions - they serve not only as residences but also as business centres and entertainment complexes. In other words, these residences have strategic importance to their owners and are not mere indulgences.

They also generate considerable employment and commerce in and around the localities they occupy. For instance, Ambani's Antilia will provide jobs to no less than 600 people from all levels of the services industry. Many of the supplies that go into building such houses and keeping them operational must necessarily come from the local markets. Coupled with the employment-generation factor, they should be seen as economic dynamos in their own right.


HOW THEY AFFECT PROPERTY PRICES

Beyond doubt, the homes of the super-rich create a certain upward pressure on the price tags of luxury and premium homes in the immediate vicinity. However, it is also true that the real estate market in general is not affected, as these luxury developments represent a minuscule segment of the wider fabric.

It must be remembered that the Indian residential property sector operates on three distinct levels. The first is affordable or budget housing, for which the demand is constant and highest. Such housing does not occur anywhere near the prime areas where HNIs tend to build their homes, and remains entirely unaffected by these developments.

The next is mid-income housing, which is most sensitive to price movements. Though certain mid-income housing projects do happen near the prime areas of our cities, buyers in this segment have very little tolerance for unnatural spiking of property prices. Builders of such projects have to keep the larger market in mind and can ill afford to price themselves out of the market. This segment is therefore also not significantly affected, either.

This leaves premium and luxury housing, which does happen in the neighbourhoods in which India’s mega-rich build their homes. This rarefied segment caters to a class of buyers that tends to be, at least to a large extent, insulated from the usual financial concerns of home loan interest rates and percentile increases in property rates.

In the super-luxury housing segment, home buying is also a lifestyle-related undertaking. Increased property rates can and are often borne as long as there is a commensurate increase in the capital value and aspirational quotient of the property. Ironically, for this segment, a higher ticket size is sometimes valued more as it attaches an esteem value to the property and limits its accessibility to the masses.

Many tend to look at these super-luxury residential properties as irrational extravagances. However, the ground reality is that the homes of India’s super-rich play their own role in boosting commerce, even as the larger industry remains democratized and oriented to the needs of the masses.

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Property rates
  • Residential
  • commercial
Mumbai
Capital Values Rate/Sq ft (INR)
Aajiwali
3000 - 5000
Ambernath
3000 - 5000
Badlapur
1000 - 3000
Bhandup (West)
11000 - 13000
Chembur (East)
15000 - 17000
Chembur (West)
11000 - 14000
Dombivali (East)
4000 - 6000
Ghatkopar
13000 - 15000
Heeranandani Gardens Estate - Powai
25000 - 30000
Hiranandani Gardens Estate - Powai
25000 - 30000
Kalyan (East)
2000 - 4000
Kalyan( West)
3000 - 5000
Karjat
1000 - 3000
Khandala
8000 - 10000
Kharegaon
5000 - 7000
King Circle
17000 - 28000
LBS Marg
12000 - 15000
Lonavala
3000 - 5000
Mulund (East)
11000 - 14000
Mulund (West)
11000 - 14000
Mumbai Nasik Highway
3000 - 6000
Powai
15000 - 17000
Senapati Bhagath Singh Road
3000 - 5000
Sion (East)
18000 - 21000
Sion (West)
17000 - 22000
Tilak Nagar
12000 - 22000
Ulhasnagar
3000 - 5000
Vikhroli
11000 - 14000
4 Bunglows
17000 - 28000
7 Bunglows
13000 - 23000
Chandivali
10000 - 15000
Malad (East)
12000 - 14000
Versova
21000 - 24000
Airoli
4000 - 8000
Belapur
6000 - 9000
Ghansoli
6000 - 8000
Kalamboli
4000 - 9000
Kamothe
4000 - 6000
Nerul
7000 - 10000
Palm Beach Road
12000 - 15000
Panvel
3000 - 6000
Sanpada
8000 - 10000
Sea Woods
8000 - 10000
Ulwe
3000 - 6000
Uran
3000 - 6000
Vashi
9000 - 12000
Altamount Road
62000 - 72000
Breach Candy
62000 - 74000
Chowpathy
48000 - 58000
Colaba
42000 - 46000
Cuffe Parade
67000 - 69000
Dadar(East)
32000 - 34000
Dadar(West)
29000 - 32000
Lower Parel
32000 - 34000
Mahalaxmi
38000 - 40000
Malabar Hills
68000 - 75000
Mumbai Central
23000 - 34000
Napean Sea Road
66000 - 74000
Parel
26000 - 34000
Prabhadevi
37000 - 39000
Tardeo
41000 - 49000
Worli
36000 - 41000
Andheri (West)
18000 - 20000
Andheri(East)
15000 - 17000
Bevarly Park
5000 - 7000
Bhayander (East)
5000 - 6000
Bhayander (West)
3000 - 5000
Boisar
1000 - 3000
Borivali (East)
11000 - 13000
Borivali (West)
10000 - 14000
Dahisar
4000 - 8000
Goregaon (East)
13000 - 17000
Goregaon (West)
12000 - 14000
Kandivali (East)
12000 - 14000
Kandiwali (West)
11000 - 12000
Malad(West)
9000 - 14000
Mira Road
5000 - 7000
Naigaon
1000 - 4000
Nala Sopara (Eastt)
3000 - 5000
Nalasopara (West)
3000 - 5000
Poonam Nagar
6000 - 8000
Shanti Nagar
7000 - 9000
Shrishti
6000 - 9000
Vasai Road
1200 - 4000
Virar
1000 - 3000
Note: Price trend are based on asking rate and not necessarily on the transaction date
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