62% of affluent Indians prefer luxury real estate, focusing more on capital appreciation than lifestyle enhancement.

2025-01-29 05:17:57

Capital Appreciation Drives Luxury Real Estate Investments Among Wealthy Indians in 2025


A recent India Sotheby’s International Realty (ISIR) survey reveals that 55% of respondents cited capital appreciation as their primary motivation for investing in luxury residential real estate in 2025, up from 44% in 2024.


Despite a significant rise in luxury property prices and slower economic growth, nearly 62% of affluent Indians, including HNIs and UHNIs, plan to invest in high-end real estate within the next 12–24 months. Interest in international properties has also surged, with overseas real estate investment among HNIs increasing from 10–11% historically to 22% in 2025.


The data highlights that nearly half of respondents expect real estate returns between 12% and 18%, while 38% anticipate returns below 12%. Fewer than 15% foresee gains exceeding 18%, reflecting a more measured outlook after years of strong growth.


Market Outlook and Trends


The survey also indicates a moderated outlook, with 62% planning investments in luxury real estate, down from 71% in 2024. However, experts suggest this reflects a more balanced market rather than a decline in interest.


Amit Goyal, MD of ISIR, believes India's luxury real estate sector is set for continued growth in 2025, particularly in trophy and bespoke assets like farmhouses and gated villas in hill and beach destinations. India’s billionaire population has doubled to 185 in the last decade, with their collective wealth tripling, further strengthening the segment.


Growing Demand for Holiday and Second Homes


The report also highlights increasing interest in second and holiday homes, with 54% of respondents favoring properties in scenic destinations. Most prefer locations within a four-hour drive, while Dubai has surpassed London as the top international real estate destination for Indian investors.


Ashwin Chadha, CEO of ISIR, emphasizes that luxury real estate is no longer just a status symbol but a resilient investment avenue. With India’s Ultra-High-Net-Worth Individuals (UHNWIs) projected to rise by 50% by 2028, the demand for high-end real estate as an inflation hedge and wealth-building tool remains strong.


Similarly, Sameer Mutreja, Founder of Scapes Hospitality, notes an increasing preference for luxury second homes in destinations like Goa and Kasauli, driven by the desire for tranquil retreats, retirement options, and the growing hybrid work culture.

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