The year 2023 has been exceptionally fruitful for India’s ultra-wealthy. According to Sotheby’s International Realty’s Luxury Outlook 2024, 71 percent of the country’s high and ultra-high-net-worth individuals have indicated their plans to purchase luxury real estate within the next 12 to 24 months.
The primary driver for the interest in luxury real estate among affluent Indians is capital appreciation. According to the Luxury Outlook 2024 report, 44 percent of high-net-worth individuals are motivated to invest in luxury properties primarily for their potential to increase in value. Lifestyle enhancement follows as a significant factor, with 23 percent of individuals seeking to acquire luxury assets such as holiday homes, farmhouses, and agricultural land to elevate their living standards alongside their growing wealth. Additionally, creating assets for future generations and generating income are important considerations for investing in luxury real estate.
Sotheby’s International Realty’s annual survey reveals that India’s ultra-wealthy are optimistic about the country’s economic outlook for 2024. Seventy-nine percent of respondents expressed confidence in India’s economic trajectory, a notable increase from 59 percent the previous year. This growing optimism has contributed to a notable decrease in the time required to finalize luxury real estate transactions.
Ashwin Chadha, CEO of India Sotheby’s International Realty, comments, “We have observed a trend where what previously took 12 to 18 months to complete a real estate purchase has now been significantly reduced.” He adds, “Transactions are now being concluded in as little as one month.”
The Luxury Outlook report indicates that luxury real estate prices have risen by approximately 40 percent over the past two years. Despite this increase, buyers remain optimistic, anticipating that the Reserve Bank of India (RBI) will lower interest rates in 2024. Amit Goyal, Managing Director of India Sotheby’s International Realty, noted that the surge in economic activity is evident from record-breaking housing sales in India in 2023 and a peak stock market performance. He predicts that the high-end segment of the real estate market will experience the greatest benefits in the coming 12 to 24 months.
Goyal further mentioned, “According to Goldman Sachs Group Inc., the affluent population is expected to double to 100 million people within three years nearly. The increase in India’s ultra-wealthy is driven by a thriving start-up ecosystem and a rising number of unicorns, which have expanded the ranks of the super-rich.”
The survey reveals that 83 percent of India’s elite possess multiple luxury properties. Beyond commercial real estate, which accounts for approximately 34 percent of investments, holiday homes are the second most popular choice, making up 25 percent of their real estate holdings. Agricultural land (21 percent) and farmhouses (20 percent) follow as other significant areas of investment for the wealthy in India.
Goa stands out as the top destination for holiday homes, with around 35 percent of affluent individuals choosing to invest in properties there. The state’s appealing beaches, hills, and lifestyle are major attractions, but the strong returns on holiday home investments are also a significant draw.
“Initially, Goa was sought after primarily for second homes. However, as demand for holiday properties has surged, prices have risen. Many are now investing not only for personal use but also for returns. Over the past 18 months, the returns on holiday homes in Goa have ranged from 70 to 80 percent,” Chadha explains.
