The special focus this evening, though, is the rich Indian consumer. He or she seems to be out on a buying spree, Whether it's cars or homes. The quest seems to be for what's bigger and better and more expensive. As far as homes are concerned, the demand for luxury homes has overtaken the demand for budget homes, according to the latest night Frank report. The demand for one core plus homes is higher than the demand for the below 50. LAC Home sold in India is at a six year high, according to that report. But it's not just houses, whether it's consumer goods or cars. The quest for the big brands luxury car brands like Mercedes Benz, BMW and Audi seem to be suggesting record sales, overall SUV sales and cars with some roofs more in demand than low end cars. It seems the rich are getting richer and are buying their way out, joining us this evening. Ashin there a residential bar, the Urban Diu Krea managing partner CP Krea, architects A. Malhotra, former managing director of Nissan Motors, India, the Krea. My first question to you. Yes, there seems to be a definitive trend towards the more expensive houses. But what's happening at the lower end? Is it falling or is the gap between the rich and the poor possibly increasing? So I think it's It's a very complex story out there and there are a myriad of factors that are bringing this kind of trend, which you are talking about. One of them is, of course, very importantly, that post covid the economy has been on an upswing and a lot of er income. Disposable income is seen as as you have just mentioned in your report, whether it's in the purchase of luxury cars or luxury homes, or even, for that matter, in terms of the binge tourism that you see, you know, suddenly the hospitality sector, the aviation sector, all these are booming to a large extent. Now when we talk about sales of residential homes, yes, there has been that lull over the years. So obviously there has been a demand which has been slowly building up because we've had for a long period a very subdued sale and demand in the segments of residential sector, particularly luxury housing. And even if you look at the NCR area, which this report talks about, you know that there's been such a major upswing in terms of sales. There has been a very strong period, a very sustained period of slow sales. So this demand that builds up as a result of urban migration as a result of higher disposable income, all these factors are contributing to it, so I won't single in on one factor. But I do want to mention one important thing here that what do we define as luxury? Because when you talk about sales of apartment, which this report talks about sales of homes of more than one car, we have to remember that luxury is not one corrode anymore for purchasing an residential unit in Delhi, I would call it more than 10. Carrots would be the luxury segment in Delhi. But if you go to anything more than five, carrots is what I would define as luxury and neida would be perhaps three carrot plus. So luxury is no more one carrot plus because there has been a huge inflation and increase in sale of residential increase in the price of residential apartments because of land costs because of rent, steel and other costs that go into the building building of residential units that, you know, one car is no more luxury in in NCR, particularly with the land costs. If you take into account one CR, I would call is now mid income housing. That's That's how the nature of uh, housing and residential segment has changed in India in the last 4 to 5 is no longer luxury. 10 cars is luxury. You say it looks like super luxury to me, a saying. Well, I, I tend to differ from the issue on the definition of luxury, considering the GDP of the country and the average GDP income still languishing around 2500 for for the middle class, luxury is one, and that is where the volumes come from. But that can be a separate discussion, however, just to answer your question that why have the luxury sales been up? And why are apartments irrespective of the definition which cost between one and above doing well? The biggest reason is Rea Rara has now started coming into play. There is a lot of consumer confidence that has come back into R specifically talking about home sales. The consumers know that their homes will get delivered after Covid. People need larger homes they have been upgrading. Uh, the hybrid model is going to stay for long. Obviously, the prices of land the cost of construction has been going up. But the middle class is now becoming upper middle class and the lower middle class is coming into middle class. There is a lot of urbanisation. Uh, jobs seen in India is far better than than the global geopolitical situation. Whether it is Europe, whether it is America, the interest rates in India are still stable. For the last three quarters, there have been no interest rate hikes. Let me give you some fiscal perspective for that and everywhere else. Right now, US is struggling with the highest interest rate, uh, yields right now and, uh, giving this entire perspective and a lot of job generations happening. The overall economy in the country doing well. And as you rightly said, the indication of an economy is also the indication of how the car sales are doing. So people want a better life. They are saving less. The data is also showing that the saving rate in the last three years has been at the lowest in India and the credit per person by banks have been increasing and the threshold is reaching a particular limit. So people are borrowing. They are getting into a mindset where they want to live for today. Live a good life. And that is why all of these things are coming together and the sales of such apartments are going up. OK, II, I will take another point to you. But you know the dip. Perhaps in the under 50 lac home, you say that upper middle class is moving into upper middle class and the other lower middle class is moving into the middle class. I would I would really like to understand that and whether that's happening or whether the disparity is growing. But before I get there a. Malhotra This trend seems to be in cars as well. The bigger brands, the more powerful luxury brands, the ones with sun roofs, the SUVs seem to be the one in demand. Absolutely right. Uh, you know, if you define the vehicle market, you take it anything below 10 lacs Today's mass 10 lacs, two K, 25 lacs, or 30 lacs would be mass to premium or coming to premium and actual luxury is about 50 lacs. So what's happening in the passenger vehicle market is all models of share and lacks their sales are under pressure. They are better available. But the moment you move to luxury cars, that is about 50 lacs do BMW Mercedes. Their growth has been something to the extent of 35% and not only the growth has been high because aspirations are rising, incomes are rising with the GST regime coming in, people are more number one income and this younger generation wants to live life. So that's causing this boom and effectively above a certain price. There is a waiting is a 40% increase in the market, although the base is very small but clearly above 10 lacs. The moment you keep going up on the price ladder, the the market size is increasing, and more than that, there is a longer waiting so clearly aspirations, rising incomes rising, more younger people, more SME S, more business people coming to the floor, and this is causing this entire boom. But this is a bit and also a lot of features are getting added in whether, in terms of safety in terms of styling in terms of technology. So all this is really to increase and you surprise the Mercedes with the average 60 lacs is now virtually 90 to 95. We we're running out of time. But what a very quick response first from you. Is this just a trend in urban India, or is this widespread? A. And what's happening in terms of disparity? Do you see that the lower end, not growing, is also worrying concern right? Which means that more people are not being added into the car market. You're absolutely right. This is more. Actually it is urban, but urban to rural is also growing. So it's not that it's urban phenomena. Urban is growing. The second part of the question. The disparity is clearly there because cars below five lacs, which is contribute 25% of the volume, or 30% is contributing only 6% of the volume. That I take that as well. And this could be worrying as well, because you are seeing a 7% drop in sales of homes below 50 lacs. Actually, what I want to say here is it's a very good question that you have navigated. The thing is that the the absolute value and number of units below 50 LAC has not gone down. The growth of that segment has gone down. So if you consider Apple to Apple, the the the homes, which are 50 lacs and the sales are higher. But the growth has kind of been lesser than the homes, which are selling above one growth. So that is one aspect that needs to be kept in mind. All right, my final question to you. Your last word on this. Do you believe that the disparity is growing? Is it only the rich who are getting richer and perhaps spending more? You're not seeing the bottom line also go up? No, I don't think so at all. I think it's an overall growth in India's economy, and it's also being reflected in terms of the purchase power and the way people are borrowing and and using disposable income. So I don't think it's uh, restricted to a particular segment of a certain income population across India and, like I don't mention, I would agree that it's actually spanning across tier one tier, two tier three cities. It's urban rural growth as well. So overall, I think we should take it in a more positive from a positive lens that this growth is happening across sectors across regions and pan India. So I think it's a very welcome side and we should look at this prosperity growing Pan India across points that you there. Of course, there are counter points as well that those who study social sciences and economics would make at this. But it's interesting to note these trends. India is rich, perhaps getting richer and spending on luxury homes and cars. Thanks all three of you for joining us and sharing sharing with us. That perspective. That's all we have time for on the show here. But the news continues here on a
