Source: Financial Express (https://bit.ly/4bxLkjS)

India’s affluent class has been increasingly redirecting their investment focus towards residential real estate for some time, marking a notable change in the country’s investment landscape. This transition emphasizes changing trends in investment preferences and reflects the motivations driving the elite’s choice to invest in residential properties.

According to a recent Knight Frank report, India’s ultra-rich are allocating a significant portion of their wealth to residential assets, with a substantial 32 percent of their investment portfolio directed towards this sector. Moreover, approximately 12 percent of India’s ultra-high-net-worth individuals (UHNWIs) are planning to purchase a new home in 2024, indicating a growing appetite for residential real estate investments.

The Knight Frank’s flagship report, The Wealth Report 2024, forecasts a remarkable surge in the number of Indian UHNWIs, projecting an increase to 19,908 by 2028 from 13,263 in 2023. This translates to a substantial 50.1% growth, representing the highest growth rate in the number of UHNWIs for any country over the next five years.

A positive economic sentiment among people is seen that reflects the resilience and potential of the Indian economy. This change in sentiment matches with a broader acknowledgment of real estate’s enduring value and its potential for sustained financial growth. Investors are strategically positioning themselves for wealth accumulation and the creation of multi-generational wealth through real estate investment.

Beyond economic factors, lifestyle shifts are playing a pivotal role in driving up demands for luxury and larger homes among India’s elite. The unprecedented growth of the ultra-luxury housing sector in 2023 accentuates a strong desire for premium living experiences among affluent individuals. This emphasis on enhanced lifestyle offerings is a key driver behind the elite’s preference to invest in residential properties, as they seek to elevate their living standards and indulge in luxurious living experiences.