Despite the pandemic and subsequent slowdown of the economy, the markets for luxury goods, houses, and cars are growing at a good pace in the country. Representative imageThe year 2020 witnessed the biggest economic disruption of the last decade. Companies were shut down due to an unexpected Covid-induced lockdown. Hundreds of thousands of employees across the country were left jobless while many others faced salary cuts. Yet these disruptions didn’t halt the forward march of the luxury sector.
Retail inflation in the country for FY 2021-22 is expected to be 5.7 percent, as per RBI. Average inflation in the country has remained around 6 percent since 2010. At this rate, prices of most of the goods and services have nearly doubled since 2010. Even a quick compound interest calculation shows an item priced Rs 1,000 in 2010 would now have increased by 89.8 percent to approx. Rs 1,898.
However, in the luxury sector, you can see in the following infographics that prices of several goods, housing units, and cars have more than doubled, and in some cases even more than tripled since 2010.
Despite the pandemic and subsequent slowdown of the economy, the markets for luxury goods, houses, and cars are growing at a good pace in the country. The luxury market growth is also reflective of the rising wealth of Indians.
According to the Hurun India Rich List 2021, the country added 40 more billionaires in one year. The year witnessed the biggest wealth increase of the last decade as eight new dollar billionaires were added every week!
The Luxury Goods market revenue in 2021 is Rs 445,235 million and the market is expected to grow by 10.99 percent every year during 2021-2025, according to Statista.
Luxury Housing prices
Prices of luxury houses have almost doubled in major cities.
As per Anarock Research, the top luxury destinations across major metros have seen significant growth in average property prices in the last decade and more between 2010 and 2021. This growth is anywhere between 25 percent to 162 percent.
Anuj Puri, Chairman, Anarock Property Consultants, told FE Online, “The fact remains that even as India’s affordable and middle-class grappled with the prospect of an uncertain future in their careers and financial ability in the last decade and now the pandemic, the rise of India’s super-rich continues unabated.”
“Just as in the rest of the world, super-luxury housing in India remains largely insulated from median real estate and economic dynamics. Buyers in this housing category, coming from both ‘old’ and ‘new’ money, remain personally wealthy despite ups and downs in their businesses or the economy at large. The country’s most aspirational and expensive locations are their exclusive playgrounds,” he added.
A report by real estate analytics platform PropEquity recently said the luxury housing sales in February 2021 went up by 21 percent to 8219 units with the Delhi-NCR region being the biggest beneficiary.
Even cities like Chennai, Kolkata, Mumbai Metropolitan Region, and Pune witnessed significant jumps in the sale of luxury housing units.
Prices of luxury houses have almost doubled in major cities. Currently, the average price of the property in South Mumbai is Rs 40,000 to Rs 60,000 per square foot.
Luxury housing demand and prices have also grown in other cities like Delhi, Bengaluru and Chennai.
Luxury Car Prices
There was a dip in luxury car sales from 40,637 units in FY 2020 to 19,781 units in FY 2021, mainly due to the pandemic. However, it has grown from 2010 levels when the luxury car market was pegged at 15,000 units. In fact, along with a growth in sales, the prices of popular luxury cars in India have seen massive growth in the last 10 years. Here’s a look at how prices of some of the iconic luxury cars have grown since 2010:
The iconic Land Rover Range Rover, which was selling for between Rs 94.5 lakh and Rs 2.75 crore, is now being sold for Rs 2.1 crore to Rs 4.38 crore. Similarly, the price of a Rolls Royce Ghost has grown by 218% from Rs 2.5 crore in 2009 to Rs 7.95 crore in 2021.
Luxury Goods prices
Luxury Goods are costlier than ever. As you can see in the infographic below, the price of the then latest version of iPhone in 2010 was just Rs 34,500. Compare this to the latest iPhone in 2021 (iPhone 12 Pro) priced at over Rs 1 lakh! There is a nearly 200 percent jump in the price of some of the latest iPhone versions since 2010.
The price of Gold has jumped from Rs 18,500 per 10 gram in 2010 to Rs 47,950 per 10 gram in 2021.
Recently, you may have read about a cotton Indian kurta sold by Gucci for Rs 2.5 lakh. The average price of Gucci Loafers was $495 in 2010. Of course, the weakening of the rupee also plays a part. Back then, one US dollar was worth just around Rs 45.73. Now it costs over Rs 73. And the average price of Gucci loafers has gone up to $800!
Interestingly, according to the Delhi State Industrial and Infrastructure Development Corporation Limited (DSIIDC), there has not been much change in the prices of foreign liquor in Delhi since 2010.
Respective price lists of DSIIDC for 2010 and 2021 show the same price of Glenlivet Single Malt 12 year old scotch at Rs 3,500 (750ML). While the price of 750 ML Johnnie Walker Blue Label scotch in 2010 was Rs 16,200. It has increased marginally to Rs 16,410 in 2021. Some small mercies for tipplers!
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