Global Investors are preferring Indian real estate market as a premium destination in the entire Asia - Pacific region, receiving almost $23 billion over the period of four years since 2018. According to many stakeholders, luxury real estate being the most preferred among other segment. An exclusive by SURFACES REPORTER.
As per the APAC trends Investor Outlook 2023 report by Collier, India's real estate market has emerged as the most lucrative and preferred option for the global investor community in the APAC region. The report also focussed on how institutional investment in real estate soared 27 per cent year-on-year in the first nine months of 2023, with a surge in deals targeting both industrial and residential sectors.
Rising Number of HNI’s and UHNI’s lading the growth
The rise in global investment has led to unprecedented growth in luxury realty sector particularly the Luxury segment. The growth is also attributed to the rise in the number of overall HNI's and UHNI’s in the country. According to the India Luxury Real Estate Report 2023 by Knight Frank, the number of ultra-high-net-worth individuals (UHNWIs) in India is poised to soar by an astonishing 63% within the next five years, reaching an impressive figure of 11,198 by 2025.
Magnifying this Ms Yukti Nagpal, Director, Gulshan Group, Delhi-NCR commented, "There was a remarkable 216% growth in luxury housing sales, with Delhi-NCR emerging as a hotspot for high-end real estate transactions. This surge can be attributed to evolving urban tastes, favourable economic indicators, and increased investments from NRIs."
Talking about the varied factors that attributed the growth, Ms Gunjan Goel, Director, Goel Ganga Developments, Pune, says, "We foresee a spike in demand for luxury residences in India, which would likely push price appreciation and accelerate sector growth. The expansion of India's middle class is accompanied by an increase in disposable income, generating a larger pool of prospective luxury property purchasers. The exceptional urban expansion in our country produces demand for high-end residential and commercial buildings, supporting the rise of luxury real estate. The Indian govt. concentrated efforts to promote real estate investment through infrastructural development and tax breaks increase India's appeal to foreign investors."
Informing about the effects of RERA and Government reforms, Mr. Boman Irani, President, CREDAI, "India's growing economic prowess and Government reforms have heightened global investor interest in the real estate sector. The Real Estate (Regulation and Development) Act (RERA) has been a gamechanger since its implementation and has enhanced transparency. This culture was further embraced by developers who built on this platform to provide an extremely transparent eco-system for different stakeholders – leading to higher volumes of investments. The pace of urbanization, aspirations of the middle class and increasing demand for upscale properties also contribute to the allure of India's real estate market. The increasing affluence and global exposure of NRIs have also fuelled a growing appetite for luxury real estate, as they seek premium properties in India for investment and lifestyle purposes."
What's in store for 2024?
With the current growth momentum, there is going to be a definitive tilt towards luxury segment in the next few years. More growth is anticipated from the tier 2 & 3 cities. Ms Yukti Nagpal from Gulshal Group says, "Tier 2 and 3 cities are making a comeback. Improved infrastructure, government initiatives, and the rise of remote work contribute to the appeal of these cities, prompting developers and investors to recognize their potential for growth and returns. This has resulted in increased real estate development outside major metros."
In addition, sustainability in design and co-living spaces will get more growth. Ms Gunjan Goel, from Goel Ganga Development comments, "Environmental awareness is driving an increase in demand for sustainable housing, which is contributing to the creation of eco-friendly structures that prioritise energy efficiency and reduce carbon footprints. The co-living category is predicted to grow significantly as people prefer to live in cities and seek flexible housing alternatives. Co-living spaces appeal to a rising sector of young workers by providing shared facilities and a feeling of community.