The second wave of Covid-19 has eased the demand for luxury homes in the last one and a half months, but real estate developers and consultants are optimistic that sales will recover once the situation returns to normal, as it did last year. Owing to a scarcity of luxury residential properties, prices are expected to remain constant or even rise marginally, according to the experts.

"All our residential projects have seen strong velocity and price-performance during January-March 2021”, said Amit Diwan, Managing Director and Country Head, Hines India. Residential buyers want good-quality larger units from reputed developers, he said. He further added that they expect that with a hybrid work model here to stay, these trends will continue and they remain optimistic that the uptick in demand will continue once the second wave settles down.

Following the first phase of Covid-19, Amit Goyal, CEO of India Sotheby's International Realty, said that demand for luxury and spacious homes increased significantly across the country. The January-March 2021 quarter at India Sotheby's International Realty, one of the leading luxury brokerage firms, was the highest in terms of demand and transaction closures, according to Goyal.

"With the current lockdown, yes there's a short pause, but we believe that the buying momentum will make a big comeback, just as it did last year when the Covid situation normalised," he said. Property prices rose in some pockets, if not all, last year due to the limited supply in this market, he said. Prices are unlikely to rise sharply, according to Goyal, but some firming is possible. Real estate has emerged as a preferred investment class in 2020, according to Reeza Sebastian, President - Residential Company, Embassy Group, with increasing interest in the luxury housing segment from both Indians and NRIs.

"Luxury residential prices across key markets have remained stable, witnessing a steady recovery path. There have been no new launches in the Rs 3 crore plus category in the last couple of years, contributing to the stability in prices through sustained demand," she added. Today's luxury home buyers, according to Sebastian, prefer branded developer ventures and ready-to-move-in properties where quality can be seen firsthand.

"With developers continuing to receive interest from HNI's, the demand for luxury residences is bound to see a sustained growth going forward," she said. "A lot will depend on how the Covid second wave behaves and how quickly the citizens are vaccinated," said Mani Rangarajan, Group COO, Housing.com, Makaan.com, and Proptiger. If the second wave is brought under control in the coming months, Rangarajan predicts an increase in demand and he believes the market will not be as bad as it was last year.

"As far as prices are concerned, I don't think there is going to be any major correction in the coming months as they are already at a decade low," he said. Housing sales in 7-8 major cities dropped by 40 per cent to 50 per cent in 2020, despite a strong rebound in the second half of the year due to pent-up and festive demand. One of the major factors in better sales in the Pune and Mumbai Metropolitan Region was the Maharashtra government's decision to minimise stamp duty.