An overwhelming 75% of the High-Net-worth Individuals (HNIs) and Ultra High-Net-worth Individuals (UHNIs) believe real estate will do well over the next two to three years and a similar percentage (74%) consider real estate is an important asset to hedge against inflation, revealed the annual Luxury Outlook Survey 2023 conducted by India Sotheby’s International Realty (ISIR).
Real estate continues to remain an attractive investment option with 61 per cent of HNIs and UHNIs looking to buy real estate in 2023-24. High rise apartments with 34%, closely followed by farmhouses and holiday homes with 30% are among the most preferred by affluent investors. Rent yielding commercial real estate is also in demand as 23% of the HNI respondents would like to invest in it.
Properties in the price range of INR 4 -10 crore are most preferred for HNIs with almost 65% looking for investment in that range, while 33% of HNIs and UHNIs are willing to spend upwards of INR 10 crores to acquire the right luxury property.
“Strong policies and reforms have supported India’s economic growth, making us 5th largest world economy in 2022. The ambition of becoming the third largest world economy by 2037, also looks bright. And the optimism can be felt all around, including robust demand in the housing sector. As the wealth of a nation grows, it is bound to bring in a new set of buyers into luxury real estate and that’s what we are witnessing” said Mr. Amit Goyal, CEO, India Sotheby’s International Realty.
“We all are witness to a fundamental shift in the desire for home ownership across age groups, post the pandemic. A young thriving workforce in India will continue to drive demand for the housing sector,” added Goyal.
The survey also indicates that as many as 34% of HNIs and UHNIs have indeed bought luxury real estate since April 2021 and given that finding the right property and concluding a deal in real estate takes time, ISIR believes many of the HNIs and UNHIs are still on the lookout for well-priced luxury homes.
Lifestyle upgrade remains the key motivation for buying property in 2023- 24, followed by capital appreciation. Interestingly, 12% of the wealthy also picked real estate as a chosen asset class to create multi-generational wealth to pass on to the next of kin.
“There is no doubt that if done appropriately, real estate can be an excellent asset for wealth accumulation and an equally strong avenue to hedge against inflation and volatility of the stock market,” said Mr. Ashwin Chadha, President, India Sotheby’s International Realty.
“We also believe that Indian real estate has started its multi-year bull run in 2021, after years of remaining subdued. Prices of luxury homes have risen in the last 16 months, but they are still only marginally higher than the peak prices of 2015, making it possible for HNIs to strike well-priced deals even now,” added Chadha.
As expected, Delhi NCR, Mumbai, Goa and Bengaluru remains the top 4 cities for respondents to buy real estate. Another interesting finding is that 11 per cent of the India’s wealthy are searching for real estate in overseas destination. Interestingly, there was very little any interest in foreign properties when India Sotheby’s had conducted a similar survey at the end of 2021. With the fears of pandemic receding and the world opening up, affluent Indians are also looking at acquiring luxury apartments in gateway cities of New York, Miami, London, Dubai and Lisbon.
When asked if they would like to consolidate their real estate portfolio for a switch to higher quality property and income generation, a significant 45 per cent of HNIs and UNHIs responded in affirmation. It is worth mentioning here that HNIs and UNHI’s in India own multiple properties.
“We believe that HNIs and UHNIs with multiple properties would benefit immensely from assessing their real estate portfolio – to remove underperforming properties and switch to better quality real estate in the right locations with prospects of capital appreciation and rental income,” the survey said.
Larger homes and open green spaces combined with excellent physical and social infrastructure emerged as the top two reasons for wealthy Indians while choosing a property to buy.
“11 per cent also picked sustainable features as one of the key reasons driving their purchase. Last year this figure was at 5 per cent. This indicates a growing awareness and availability of green, sustainable homes,” the survey found which indicates the growing awareness amongst the affluent to live a more sustainable life and better availability of sustainable homes inventory as developers switch to green offerings.
About India Sotheby’s International Realty
Born from the rich heritage of the Sotheby’s Auction House, The Sotheby’s International Realty® network is present in 84 countries and territories with 1000 offices and 26,000 sales associates and has achieved a record real estate global sale of $204 billion.
India Sotheby’s International Realty established its presence by setting up its first office in New Delhi in July 2014. It now has offices in Mumbai, Kolkata, Bengaluru, Goa, Colombo and the mandate for the Maldives. The team in India comprises senior private bankers and experts from real estate, hospitality and luxury goods industries who have lived and worked in India and abroad. They bring a wealth of experience which has enabled them to win the trust of an affluent and exclusive clientele.
Our India residential portfolio includes listings of luxury properties across the country. From Luxury farmhouses, bungalows, villas, holiday homes to penthouses and apartments. We market the most exclusive homes in a targeted and effective manner.
Our international desk provides access to the best residential addresses across the globe & offers advisory services on citizenship by Investment. Our offering has expanded to include commercial real estate and advisory services for offices, institutional, retail, hotels and land transactions.