The annual Luxury Outlook Survey 2024 conducted by India Sotheby’s International Realty (ISIR) unveiled a robust economic optimism among High-Net-Worth Individuals (HNIs) and Ultra High-Net-Worth Individuals (UHNIs), with a staggering 79% expressing confidence in the Indian economy’s positive trajectory for 2023-24, compared to 59% last year.
High life
Despite an almost ~40% rise in property prices over the last 24 months and increase in mortgage rates, 71% of respondents expressed an intent to buy real estate in the next 12-24 months, showcasing significant confidence in the market.
Capital appreciation has overtaken lifestyle upgrades, as the primary motivation for real estate investment (44%), signaling a return of investors to the market, with a focus on long-term appreciation.
“India is shaping its destiny far more confidently than ever before. The world’s fifth-largest economy is poised to become the third-largest by 2027, according to the International Monetary Fund. The country’s central bank, RBI, pegs a GDP growth guidance of 7% in 2024.
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.
Survival Of The Richest
The affluent class is expected to nearly double to 100 million people within three years, according to Goldman Sachs Group Inc. India’s ultrawealthy are growing. The robust start-up eco-systems 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. “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 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” adds Ashwin Chaddha CEO, India Sotheby’s International Realty.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.
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.
Diversity In Investment
Apart from primary residences, respondents showcased a diverse array of real estate assets, with 34% owning commercial real estate, 25% holiday homes, 21% agricultural land, and 20% farmhouses.
In other notable findings, 35% of holiday home buyers expressed Goa as their preferred destination, highlighting the enduring appeal of Goa’s lifestyle among India’s wealthy. Desire to invest in overseas property remained stable at 12%, with Dubai UAE, and USA maintaining their positions as top choices.
43% of UHNI and HNI respondents expressed a desire to consolidate their portfolios, focusing on better quality properties and rent-yielding assets. 34% of UHNIs and HNIs have shifted to digital mediums, including 3-D virtual reality and walkthroughs, to research and view properties, underscoring the impact of digital transformation even at the top of the luxury housing market.
