India : In a notable shift in investment preferences, a staggering 71% of affluent Indians express a keen interest in luxury real estate over the next 12-24 months, marking a significant resurgence in confidence within the property market. The annual Luxury Outlook Survey 2024 by India Sotheby’s International Realty (ISIR) reveals key insights into the evolving landscape of real estate investments among High-Net-Worth Individuals (HNIs) and Ultra High-Net-Worth Individuals (UHNIs).
Investment Motivations and Economic Confidence
The survey highlights a noteworthy transition, with capital appreciation emerging as the predominant motivation for real estate investments, eclipsing lifestyle upgrades from the previous year. A remarkable 79% of HNIs and UHNIs express confidence in the positive trajectory of the economy for 2023-24, showcasing a substantial increase from the 59% recorded in the previous year.
Positive Mortgage Outlook and Interest Rates
Anticipating positive economic trends, 56% of surveyed individuals believe that the Reserve Bank of India (RBI) will initiate a reduction in interest rates in 2024, indicating a favorable outlook for mortgages and financing within the real estate sector.
Diversification of Real Estate Portfolios
The survey underscores the trend of diversified real estate portfolios, with a striking 83% of affluent Indians owning multiple luxury properties. Beyond primary residences, ownership extends to commercial real estate (34%), holiday homes (25%), agricultural land (21%), and farmhouses (20%).
Vacation Home Preferences and Overseas Investments
Notably, 35% of holiday home buyers express a preference for Goa as their second home destination, emphasizing the enduring allure of the city among India’s wealthy. The desire to invest in overseas properties remains stable at 12%, with Dubai UAE and the USA being the top choices.
Strategic Portfolio Consolidation and Digital Adoption
Approximately 43% of UHNIs and HNIs express a desire to consolidate their real estate portfolios, focusing on higher quality properties and rent-yielding assets. Digital mediums, including 3-D virtual reality and walkthroughs, have gained prominence, with 34% utilizing these tools for property research and viewing.
Insights from Industry Leaders
Amit Goyal, Managing Director of India Sotheby’s International Realty, notes the robust economic momentum reflected in record-breaking housing sales in 2023 and a thriving stock market. Goyal anticipates the top end of the real estate market to benefit significantly in the coming months.
Ashwin Chaddha, CEO of India Sotheby’s International Realty, observes a remarkable shift in economic sentiment, aligning with a broader acknowledgment of real estate’s enduring value and potential for sustained financial growth. Chaddha emphasizes the strategic positioning of investors for wealth accumulation and multi-generational wealth creation through real estate investments.
