January 18, 2024: Despite an almost over 40% rise in property prices over the last 24 months and an increase in mortgage rates, 71% of respondents of a survey conducted by India Sotheby’s International Realty expressed an intent to buy real estate in the next 12-24 months.
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.
Capital appreciation has overtaken lifestyle upgrades, as the primary motivation for real estate investment (44%), signalling a return of investors to the market, with a focus on long-term appreciation, it said.
“India is shaping its destiny far more confidently than ever before. According to the International Monetary Fund, the world’s fifth-largest economy is poised to become the third-largest by 2027. 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. 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 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, of 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 acknowledgement 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, of 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 ting 83% of 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% 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. The desire to invest in overseas property remained stable at 12%, with Dubai, the UAE, and the US maintaining their positions as top choices.
43% of UHNI and HNI respondents wanted 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.
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