The OED defines Value as: The regard that something is held to deserve; the importance, worth, or usefulness of something; the material or monetary worth of something; or the worth of something compared to the price paid or asked for it. When it comes to luxury homes, HNIs define ‘value’ as a combination of these definitions.
India’s booming corporate culture has led to a steady demand for luxury homes. Well-funded start-ups and their astronomical evaluations, as well as a migration influx of the affluent have contributed to the rise in sales.
When these individuals think of buying a luxury home, they aren’t merely looking to buy an “expensive house”. They are looking at the crème de la crème of housing in an exclusive area. Luxury homes have the most striking architecture, premium landscaping and state-of-the-art amenities.
The buyers of expensive houses and apartments are aware of the fact that the value of any other commodity might decline with time but real estate is the only sector which can generate profitable income even when the market is down.
Having said that, determining a correct price for any home is a challenge. Knowing how to look at a home, measuring its strengths and weaknesses, comparing it to similar homes, examining the surrounding market and arriving at a decision is not a simple task. Luxury homes create misconceptions when it comes to pricing. With very few comparable homes for reference and each luxury home having unique features that only some buyers will value, what may be ‘value for money’ for a buyer may be too extravagant for another.
It is of no use trying to use rudimentary ways to determine the price of a home like using price per square foot. This is a sure fire way to get luxury homes pricing wrong! Location plays a key role in the comparable sales data. The neighbourhood in which a property is located can have a huge influence on its value.
As much as one’s own judgement, buyers of high-end properties have a great team of a good real estate agent, a trusted financial advisor, an experienced accountant, and a lawyer who is familiar with local tax and property law.
While the investment is often considered a splurge, in recent times, luxury homes have proven to be a practical investment that provides better returns in the long term.
Article written by Mr. Nirmal Kolte, Project Director, 24K - Kolte Patil Developers Limited
Nirmal Kolte, the young scion of the Kolte family and the face of new leadership at Kolte Patil Developers, not only brings a novel perspective and approach to the 25-year-old legacy driven organization but truly lives up to the company’s motto of Creation, not Construction. A dynamic, thoughtful and enterprising individual, Nirmal received his Bachelors in Construction Management from The University of Melbourne, Australia and his Masters in Management from the Lancaster University (U.K). At Kolte Patil, Nirmal spearheads 24K, the group’s foray into ultra-luxury projects that are designed with passion, indulgence and in keeping with all the salient aspects, well suited to its targeted audience.