Majority Wealthy Indians Wish To Invest In Luxury Real Estate

The annual Luxury Outlook Survey 2024 conducted by India Sotheby’s International Realty (ISIR) unveiled a robust economic optimism among High-Net-Worth Individuals (HNIs) and Ultra High-Net-Worth Individuals (UHNIs), with a staggering 79% expressing confidence in the Indian economy's positive trajectory for 2023-24, compared to 59% last year.

This optimistic outlook extends to the real estate sector. Despite an almost ~40% rise in property prices over the last 24 months and increase in mortgage rates, 71% of respondents expressed an intent to buy real estate in the next 12-24 months, showcasing significant confidence in the market.

Capital appreciation has overtaken lifestyle upgrades, as the primary motivation for real estate investment (44%), signaling a return of investors to the market, with a focus on long-term appreciation.

"India is shaping its destiny far more confidently than ever before. The world’s fifth-largest economy is poised to become the third-largest by 2027, according to the International Monetary Fund. The country’s central bank, RBI, pegs a GDP growth guidance of 7% in 2024.

The rising economic momentum is reflected in record breaking housing sales numbers in Indian real estate in 2023 and an all-time high stock market. We believe the top end of the real estate market will benefit the most in the next 12-24 months. The affluent class is expected to nearly double to 100 million people within three years, according to Goldman Sachs Group Inc. India’s ultrawealthy are growing. The robust start-up eco-systems and a growing number of unicorns have added to the swelling ranks of the super-rich. Our Luxury Outlook survey findings indicate a renewed and heightened interest among investors who now view real estate as a compelling avenue for long-term wealth creation,” said Amit Goyal, Managing Director, India Sotheby’s International Realty.

About 56% of HNIs and UHNIs believe that the Reserve Bank of India (RBI) will start reducing interest rates in 2024, indicating a positive mortgage and financing outlook. The survey also reflected that a staggering 83% of affluent Indians own multiple luxury properties, reflecting a trend of diversified real estate portfolios among the elite.

Apart from primary residences, respondents showcased a diverse array of real estate assets, with 34% owning commercial real estate, 25% holiday homes, 21% agricultural land, and 20% farmhouses.

In other notable findings, 35% of holiday home buyers expressed Goa as their preferred destination, highlighting the enduring appeal of Goa's lifestyle among India's wealthy. Desire to invest in overseas property remained stable at 12%, with Dubai UAE, and USA maintaining their positions as top choices.

43% of UHNI and HNI respondents expressed a desire to consolidate their portfolios, focusing on better quality properties and rent-yielding assets. 34% of UHNIs and HNIs have shifted to digital mediums, including 3-D virtual reality and walkthroughs, to research and view properties, underscoring the impact of digital transformation even at the top of the luxury housing market.