29% wealth of Indian UHNWIs allocated towards purchase of residential property in 2021: Knight Frank Wealth Report 2022

As much as 29% wealth of Indian UHNWIs is allocated towards purchase of principal and second homes.

As many as 10% of India’s ultra-high-net-worth individuals (UHNWIs) with a net worth of $30 million and above, plan to buy a new home in 2022. Indian UHNWI prefer to invest in properties in the domestic market  followed by international markets of UK, UAE and US. Globally, 21% of the ultra-wealthy are expected to purchase a home in 2022, Knight Frank’s The Wealth Report 2022 said on March 1.

The report further highlighted that on an average an Indian UHNWI owns 2.3 homes and 32% of the Indian UHNWIs have rented out their second homes during 2021.

According to the Attitude Survey that is part of the Wealth Report 2022, 29% wealth of Indian UHNWIs is allocated towards purchase of principal and second homes.

Further, 22% of UHNWIs’ investable wealth was allocated towards direct purchase of commercial property (including rental property, offices etc.) while 8% was allocated towards indirect purchase of commercial property (including REITs, funds, etc.). Additionally, the survey cited that 8% of the property portfolio was held overseas.

The survey further reveals that 31% of the respondents have invested in office followed by 15% in Retail, Residential Private Rented Sector (PRS) and Development Land each in 2021. All wealthy investors want more ESG-compliant assets to future proof their portfolios. 77% of Indian respondents expect an increasing opportunity in ESG for creating and preserving wealth.

“Investment in the real estate sector in India has grown in recent times especially in the wake of the pandemic as real estate was viewed as a safe and tangible investment option amidst the economic volatility. Further, at attractive valuations, real estate continued to drive institutional demand. The governing rules surrounding REITs are regularly updated to augment the scope of these investment instruments in India," said Shishir Baijal, Chairman and Managing Director, Knight Frank India.

Our survey indicates that the investor interest will remain stable in 2022. Interestingly investors showed preference towards assets such as land development, healthcare, retail and logistics etc. ESG will continue to gain prominence as key influence in property purchase decisions in 2022, he said.

“The Wealth Report confirms a clear rise in demand for residential property - with 26% of global UHNWIs looking to buy a new home in 2021, a sharp increase from the 21% we revealed in 2020. Demand is especially strong for rural and coastal properties, with access to open space being the most highly desired feature. The pandemic is super-charging demand for locations that offer a surfeit of wellness - think mountains, lakes, and coastal hot-spots. Demand will help fuel price rises of up to 7% for our key markets this year,” said Liam Bailey, Global Head of Research at Knight Frank.