Despite a nearly 40 percent rise in property prices over the last 24 months and increase in mortgage rates, 71 percent of wealthy Indians expressed an intent to invest in luxury real estate in the next 12-24 months. This finding is based on the annual luxury outlook survey 2024 conducted by India Sotheby’s International Realty (ISIR), which focuses primarily on luxury residential sales and large property transactions.
The survey stated that Goa remains the top hot spot for vacation homes, commanding a significant 35 percent share of responses. Desire to invest in overseas property remained stable at 12 percent, with Dubai UAE, and USA maintaining their positions as top choices, the survey showed.
ISIR has included over 500 High-Net-Worth Individuals (HNIs) and Ultra High-Net-Worth Individuals (UHNIs) across the country in the luxury outlook survey 2024. The survey findings were released at an event in New Delhi on January 18, 2024.
The survey showed that capital appreciation has overtaken lifestyle upgrades as the primary motivation for real estate investment, signalling a return of investors to the market, with a focus on long-term appreciation.
Moreover, 43 percent of UHNI and HNIs respondents expressed their desire to consolidate their portfolio, to focus on better quality properties and income-generating assets.
Amit Goyal, Managing Director, India Sotheby’s International Realty, said that according to the International Monetary Fund, the world’s fifth-largest economy is poised to become the third biggest by 2027 and this rising economic momentum is reflected in record-breaking housing sales 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. Hurun’s 2023 rich list identifies a growth of 16 percent of Indians with wealth of $120 million or more. The robust start-up eco- systems and growing number of unicorns have added to the swelling ranks of the super-rich. Our luxury outlook survey reflects a renewed and heightened interest among investors who now view real estate as a compelling avenue for long-term wealth creation,” Goyal said.
The survey also reflected that 83 percent of surveyed 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 percent owning commercial real estate, 25 percent holiday homes, 21 percent agricultural land, and 20 percent farmhouses.
Ashwin Chaddha CEO, India Sotheby's International Realty, said that there is a shift in economic sentiment, reflecting the resilience and potential of the Indian economy and it is not surprising that there’s been a substantial increase in new luxury project launches across the top seven cities in 2023.
“There’s also a shift in sentiments that aligns with a broader acknowledgment of real estate's enduring value and potential for sustained financial growth. We believe, investors are strategically positioning themselves for wealth accumulation and creating multi-generational wealth through real estate investments,” he said.
As far as interest rates on home loans are concerned, 56 percent of HNIs and UHNIs believe that the Reserve Bank of India will start reducing interest rates in 2024, indicating a positive mortgage and financing outlook.
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