Capital appreciation overtakes the primary reason to buy real estate, compared to lifestyle upgrade last year.
As many as 71% rich Indians want to invest in real estate in the next 12-24 months, indicating that there is significant confidence in the property market. Capital appreciation has overtaken lifestyle upgrade as the primary motivation for real estate investment, signaling the return of investors to the market, said the annual Luxury Outlook Survey 2024 conducted by India Sotheby’s International Realty (ISIR).
The annual Luxury Outlook Survey 2024 conducted by India Sotheby’s International Realty (ISIR) showed that High-Net-Worth Individuals (HNIs) and Ultra High-Net-Worth Individuals (UHNIs) were confident about investing in the real estate market, with a staggering 79% exuding confidence in the economy’s positive trajectory in 2023-24, compared to 59% last year.
As far as interest rates on home loans are concerned, 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.
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Diversified real estate portfolio
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, 34% own commercial real estate, 25% holiday homes, 21% agricultural land and 20% farmhouses.
As many as 35% of holiday home buyers said that they preferred Goa as a second home destination, highlighting the enduring appeal of the city among India’s wealthy.
The desire to invest in overseas properties remained stable at 12%, with Dubai UAE, and USA being their top choice.
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Real estate portfolio consolidation
As many as 43% of UHNI and HNI respondents expressed a desire to consolidate their portfolios, focusing on better quality properties and rent-yielding assets. Almost 34% of UHNIs and HNIs have shifted to digital mediums, including 3-D virtual reality and walkthroughs, to research in order to view properties.
“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 ultra wealthy are growing. The robust start-up ecosystems 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.
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“We are witnessing a remarkable shift in economic sentiment, reflecting the resilience and potential of the Indian economy. We are not surprised that there’s been a substantial increase in the launches of new luxury projects across the top seven cities in 2023. There’s also a shift in sentiment 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,” said Ashwin Chaddha, CEO, India Sotheby’s International Realty.
