The luxury segment of India's real estate has been in the eye of the storm that hit the sector in the last several financial quarters. However, the segment has been able to weather the rough waters, all things considered. It's not to say that it hasn't been affected at all. But the ratio at which the damages have been recorded isn't as alarming as experts expected.

Historically, the luxury segment has seen the steepest growth trajectory in the sector. India's wealth accumulation has risen exponentially, as highlighted by the Frank Knight Wealth Report 2019. The report elaborates further, saying that the country witnessed a 116% rise in its billionaire population, between 2013 and 2018. Another 39% growth is expected in the next five years, effectively rising above the global and regional average.

Now, keeping in tandem with India's growing purchasing power and disposable income, it's only natural that the sales of luxury homes have been on the rise as well. Just as people are finally able to afford homes of elevated quality, they are choosing those homes over the more modest options.

Needless to say, the luxury segment has been affected by the recent real estate slump. Reports of unsold luxury home units are frequently published by national dailies and some of the country's most expensive micro-markets have seen a downward shift in the rate of purchases. Economic Times reports that the rating agency ICRA has predicted the slump in the sale of luxury housing would continue, well into the financial year of 2020 as well, backed by the liquidity pressure. The report further accentuates the downward shift, saying that a total value of ₹45,000 crores worth of unsold inventory remains in Central Mumbai, and has severely impacted the luxury real estate performance in the city.

Despite the downcast numbers, industry experts have reason to be happy. In a residential real estate market report, published by Liases Foras, it is found that the luxury segment of India's realty sector isn't that poorly off, after all. Their findings show that the growth in the luxury segment (homes that fall between the ₹1 to 2 crore range) remained stable, on a quarter-to-quarter basis and witnessed a 2% growth on a year-to-year basis. Their report illustrates that the Mumbai Metropolitan Region contributed about 34% to the cumulative growth numbers.

Adding to this, the reports also found that the ultra-luxury segment, which includes homes that are above ₹2 crores also witnessed an increase of about 1% on a year-on-year basis, despite recording a slight dip, on a quarter-to-quarter basis.

What this essentially means is that even if quarter-on-quarter sales numbers have taken a mild hit - the luxury and ultra-luxury segments have performed better, even if it's just by a slim margin on a year-on-year basis. A lot of financial and real estate experts allude to this uncharacteristic growth in the luxury segment to panic purchases. With the fear that the prices would soon become even steeper, high net-worth individuals (HNI) and non-residential Indians (NRI) are choosing to buy a home now before it gets too late. There have been claims that suggest that the unsold housing stock is slowly, but steadily depleting across markets.

The fall in the Rupee's valuation also contributed heavily to the rise of luxury home sales. A weak rupee coupled with a more solid regulatory body encourages NRIs and HNIs to opt for investment options within the segment. A healthy degree of appreciation helps investors realise the potential held by luxury projects, making them viable investment options.