Real estate company India Sotheby’s International Realty’s annual survey revealed a surge in interest among wealthy Indians to invest in luxury real estate, with 71 per cent of them looking to invest in the sector over the next 12-24 months. Capital appreciation has overtaken lifestyle upgrades, as the primary reason for investing in luxury real estate, with 44 per cent saying long-term appreciation is what they seek from real estate. The annual Luxury Outlook Survey 2024 released on January 18, 2024, indicate that 79 per cent of High-Net-Worth Individuals (HNIs) and Ultra High-Net-Worth Individuals (UHNIs) expressed confidence in the Indian economy's positive trajectory for 2023-24, a huge increase from 59 per cent last year.
Despite property prices rising 40 per cent in the last 2 years, also with increased mortgage rates, 71 per cent of respondents intend to buy real estate in the next 12-24 months, Sotheby's report said. As much as 35 per cent of holiday home buyers said Goa is their preferred destination, the survey found.
Amit Goyal, Managing Director, India Sotheby’s International Realty, noted that the country's economic momentum and rising number of unicorns contributing to a surge in the luxury real estate market.
"The world’s fifth-largest economy is poised to become the third-largest by 2027, according to the International Monetary Fund. 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, The affluent class is expected to nearly double to 100 million people within three years, according to Goldman Sachs Group Inc. The robust start-up eco-systems and a growing number of unicorns have added to the swelling ranks of the super-rich,” said Goyal adding that more investors due to these reasons are viewing real estate as a compelling avenue for long-term wealth creation.
Ashwin Chaddha, CEO, India Sotheby's International Realty noted the substantial increase in the launches of new luxury projects across the top seven cities in 2023 as a sign of this coming change.
56 per cent of HNIs and UHNIs expect RBI to reduce interest rates in 2024, indicating a positive mortgage and financing outlook. As much as 83 per cent of affluent Indians own multiple luxury properties, reflecting a trend of diversified real estate portfolios in this income group, the survey said. They own apart from their primary residences, commercial real estate (34 per cent owning it, holiday homes (25 per cent), agricultural land (21 per cent), and farmhouses (20 per cent).
A total of 35 per cent of holiday home buyers preferred Goa, and 12 per cent of HNIs expressed a desire to invest in overseas property. For those seeking overseas real estate investment, Dubai UAE, and the USA continue to be their top choices.
A total of 43 per cent of UHNI and HNI respondents seek to consolidate their real estate portfolios, focusing on better-quality properties and rent-yielding assets. As much as 34 per cent of wealthy investors said they have shifted to digital mediums, including 3-D virtual reality and walkthroughs, to research and view properties.