Apartments for Rs 4.5 crore! Will they sell?

With the range of properties coming up in various parts of the country, one can't help but feel that a lot of people probably plan to living in apartments or residential areas that boast the snazziest of facilities.

The sheer magnitude and size of the projects that are being developed would make you wonder about the demand in the high-end luxury segment. Why are individuals inching towards these properties that come attached with such a hefty price tag? Why are real-estate companies continuing to build these high-end properties?

Take, for instance, Unitech Grande that is being developed in Noida over 347 acres of sprawling land. The 2,200 sq ft-plus apartments have been priced at Rs 7,750 per sq ft with the first installment comprising 10 per cent of the cost.

The price of these apartments starts from about Rs 1.8 crore (Rs 18 million) and can easily climb up to Rs 4.25 crore (Rs 42.5 million), depending on the size. The project involves 10 global architectural and design consultants.

It comprises 90 towers, of which eight will be signature towers and four gateway, having 36-45 floors each. That's not all, and other facilities at this enclave include a convention centre, a 1,000-seater auditorium, well-equipped libraries besides a host of other services.

With a rise in incomes and property prices, a large number of real-estate companies are offering, besides their other projects, high-end properties for consumers.

And while Unitech Grande is one among the latest additions, Omaxe has a project along similar lines but on a somewhat lower scale in Faridabad. Called The Forest, this one has apartments ranging from Rs 4,000-6,500 sq ft and attracts a price tag of Rs 2.25-4.5 crore (Rs 22.5-45 million).

With the NCR and important metros attracting most of these companies, in Mumbai, for instance, there are other upcoming luxury complexes including those like Chattan on Altamount Road and Evita in Powai.

There's also Raheja Anchorage by K Raheja Universal, the Oberoi project on Annie Besant Road between Worli and Prabhadevi, and more projects on Nepean Sea Road touching the sea.

And it's old news that even the most basic facilities in these high-end projects include duplex penthouses with double level terraces that include swimming pools, fancy lily ponds in family lounge areas, designer light fittings complete with fancy chandeliers, wooden laminated floorings as well as Italian marble options, imported modular woodwork in the bedrooms, jacuzzis, saunas and steam rooms.

So why is there a continuing burst of luxurious villas and penthouses in the Indian real-estate market?

According to Ghulam Zia, vice president, Knight and Frank, "Prices are rocketing and that's why the middle segment is losing its lustre in this process."

But Zia feels that it won't be the case for too long as the market would finally see some sort of stability. "The market for high-end properties is booming, but the mid-rung is not being ignored," he adds.

But with rising disposable incomes, the definition of 'mid-rung' too is fast changing with almost everyone loosening their purse strings to settle into more comfortable, more luxurious apartments. Which leads us to the next crucial question: is the high-end market getting crowded?

Kunal Banerji, vice president, marketing Ansal API, attempts to give us an answer.

According to him, the high-end property mart isn't too populated. "A lot of high net worth individuals who reside in old kothis and bungalows are now moving into luxury apartments simply because it is very difficult to manage palatial houses," he says.

He also feels that these properties make for sound investments and, interestingly, the NRI populace who are investing here are escalating the demand.

Ansal, which has Acropolis in Ghaziabad, is now coming up with golf villas in Lucknow. But are developers overlooking the mid-rung segment that now come within the price tag of Rs 50-60 lakh (Rs 5-6 million)?

Banerji feels that a lot depends on where exactly builders develop projects. Citing the example of the Acropolis, he says, "The apartments there are in no way inferior to any other so-called high-end properties, but the location of the apartments are such that the price can never be too exorbitant."

Interestingly, Unitech is planning to invest around Rs 6,000 crore (Rs 60 billion) for developing Grande, which would eventually house around 5,300 apartments in Noida.

Sanjay Chandra, president, United, in fact, had mentioned at the launch of Grande, "India is fast being recognised as one of the world's fastest growing economies and a market for a large number of international luxury brands."

In his view, "Indian consumers are increasingly developing a flair for lifestyle and luxury based goods, an outcome of growing affluence and increasing disposable income among urbanites."

As a real-estate analyst puts it, "The demand is high at the moment as people want everything to be at par with global standards including real-estate, too."

With the developers willing to provide it, the segment seems to reach a high at this point of time. A point which is substantiated by the use of global architects and consultants for almost all real-estate projects.

Emaar MGF, for instance,  has a tie-up with an Australian company while Unitech has signed up with companies like Callison architects, and even a global company for lighting and design. All this sounds extremely good and tickles the aspirational values of customers to a new level, but will we see saturation in the market?

Ansal's Banerji doesn't think so. "The segment is not as crazy it might appear so I think we will see development of such properties in the near future." He also feels that the middle segment (Rs 40-50 lakh) will continue to thrive.

Zia admits that some of the prices that are doing the rounds in the market are quite mindboggling. "The prices in Mumbai, for instance, are always comparatively high but a few of them do seem quite unrealistic."

And it's not only in metros like Mumbai or Delhi, but cities like Pune and Lucknow too are seeing the demand for high-end properties escalate to a new degree. Ansal's is hoping that its Golf Villas property in Lucknow will become one of the most sought after addresses in the city.

Unitech's outdoor ad for Grande reads: "See what life can be." Looking at the high-end residential market in the country, it's clearly the writing on the wall.