India’s luxury real estate market is currently experiencing strong growth. According to estimates, the majority of High-Net-worth Individuals (HNIs) and Ultra High-Net-worth Individuals (UHNIs) are looking to purchase luxury real estate during 2023-24. According to a latest survey, around 60%-70% of respondents were interested in properties priced between ₹5-10 crore, with around 30%-35% of them willing to pay more than ₹10 crore for the right luxury property. The prices of luxury properties have also appreciated by 8-10% over the past year across major cities and have exceeded the 2015 peak level.
The Indian luxury real estate market is currently in a multi-year bull run that began in 2021, after years of being subdued. Despite the rise in prices over the past 12-18 months, they are still only marginally higher than the peak prices of 2015, making it possible for HNIs to find well-priced deals. It was found that the key motivation for buying property in 2023-24 was a lifestyle upgrade, followed by the expectation of capital appreciation. Furthermore, it was found that 10%-12% of HNIs and UHNIs chose real estate as an asset class to create multi-generational wealth to pass on to the next of kin.
The top four cities in India to purchase luxury real estate are Delhi NCR, Mumbai, Goa, and Bengaluru. However, the survey also found that a considerable number of wealthy individuals in India are exploring real estate options in overseas destinations. The survey further revealed that over 50% of buyers prefer to buy luxury properties in city and urban communities, while approximately one-third are interested in owning a farmhouse or holiday destination. High-rise apartments are the most sought-after real estate investment option for the respondents, followed by farmhouse/holiday homes. Additionally, around 25% of the buyers are interested in rent-yielding commercial real estate.
It was also found that larger homes and open green spaces, combined with excellent physical and social infrastructure, were the top two reasons for wealthy Indians when choosing a property to buy. Additionally, nearly four fifths of the luxury property buyers believe that real estate is an important asset to hedge against inflation. It was also noted that around one tenth of the buyers picked sustainable features as one of the key reasons driving their purchase, a positive trend towards environmentally friendly properties.
According to Anand Ranjan, a property consultant in sector 56 Gurgaon, housing sales remain strong amid pent-up demand and the country’s economic growth. “As the Indian economy continues to grow, we can expect more people to enter the rich class from the upper middle classes. This will drive the demand of luxury real estate in the country” Ranjan said. He added that a fundamental shift in the desire for homeownership across age groups has been observed post-pandemic, with a young, thriving workforce in India continuing to drive demand for the housing sector. Kailash Sachdeva, a property Consultant Jalwayu Vihar, sector 25 Noida also added that despite the rise in prices over the past year, they are still only marginally higher than the peak prices of 2015, creating opportunities for HNIs to strike well-priced deals. Sachdeva also highlighted that lifestyle upgrade and capital appreciation as the key motivators for purchasing property in 2023-24, while larger homes and open green spaces, combined with excellent physical and social infrastructure, are the top priorities for wealthy Indians when choosing a property to buy.
Anand Ranjan 