New Delhi: A report in 2013 had labelled Mumbai as the 16th most expensive city globally in terms of owning a residential space. The southern region of the island city is seen as the most prime, with locations such as Colaba, Cuffe Parade and Malabar hills topping the land price charts. Owning a home in these and similar location of other cities can cost a buyer more than he or she would earn in two lifetimes.
The question ‘does location provide you with luxury?' is an interesting one. Is a family that lives in a compact, old, stuffy and featureless 1 BHK flat in Cuffe Parade living in luxury? Or would such a family live in luxury if it sold this flat and moved to a more modern, spacious, comfortable and better appointed flat in the suburbs?
Given the ever worsening shortage of land in the prime locations of our larger cities, home prices in these areas are largely beyond affordability for most buyers. Homes in such locations are bought by the extremely rich for the sake of address value and easy access to the CBD, even if they lack the superior amenities of newer, more modern buildings in further-flung areas. In such cases, the luxury factor is vested almost exclusively in the snob appeal of the location.
For a family living in South Mumbai that plans to move to a bigger place, the options available in their neighbourhood would either be non-existent or extremely heavy on their pocket. One must remember that many families owning homes in central posh locations purchased these homes many years ago. In some cases, these homes have been handed down over at least two generations. Not all such families would be generating income that matches the locations they live in.
However, if such a family were to put its current home on the market and obtain the kind of selling price that such locations can yield solely on the basis of address value, they can relocate to a home in another part of town that offers all the luxuries of a modern lifestyle. For this family, the luxury factor will then have increased dramatically. In other words, if we look at the concept of luxury as a matter of perception, the ballgame changes entirely.
On a different level, but keeping the same principle in mind, families living in the suburbs or far-suburban areas who are seeking to upgrade their lifestyles in the same locality may have only a marginal additional budget. Nevertheless, the sale proceeds of their current home coupled with this additional budget would certainly fetch them something that provides them with more luxury in terms of space.
In other words - if the true meaning of luxury is assumed to be solely about spending huge amounts of money to buy a super-premium property in a prime location, then certainly only the ‘uber rich' would get the taste of such luxury.
However, luxury means different things to different people - it literally exists in the eyes of the beholder. If someone who feels the need to upgrade their lifestyle and to move to a better, bigger home that meets all their requirements, any option that provides them with a perceptibly superior living experience is luxury for them.
In real estate market terms, the definitions of 'premium' and 'luxury' are more or less standardized and fairly rigid in terms of ticket sizes, amenities offered and locations involved. However, these are market standards and do not account for a far more human factor - namely personal perception. If we look at luxury from such a perspective, there are in fact no hard and fast definitions at all.
(Om Ahuja is the CEO of Residential Services, JLL India)