India's Wealthy Anticipate Moderation in Luxury Housing Market for FY27

Demand for luxury residential real estate is expected to moderate in 2026-27, with nearly 56% of HNIs and UHNIs anticipating a cooling market in FY27. According to a survey by India Sotheby’s International Realty, equities remain the top investment choice, favoured by 67% of respondents, followed closely by physical real estate at 64%.

When asked about the outlook for the luxury residential real estate market in 2026-27, 56% of HNI respondents expected a moderation, while 44% did not. The real estate consultant conducted a survey of nearly 700 high-net-worth individuals (HNIs) and ultra-HNIs to assess their sentiments towards India's economic growth prospects, investment strategies, and outlook for the luxury housing market.

In its latest report, 'The India Luxury Residential Outlook 2026' released on Jan 25, India Sotheby's International Realty (ISIR) mentioned that 67% of HNIs and UHNIs remain firmly bullish on India's growth story despite global headwinds. Nearly 57% of respondents said they plan to continue investing in real estate during the period, though in a more selective manner, while 43% indicated they would stay away.

Equities continue to dominate preferred investment avenues, with 67% favouring stocks, followed closely by physical real estate at 64%. Commodities (28%) and financialised real estate products such as AIFs, REITs, and InvITs (22%) are also gaining traction, underscoring the growing role of real assets in wealthy portfolios, the survey showed.

City-based residential property remains the top choice among those planning to invest in real estate. About 31% are looking at primary residences, 30% at investment-grade physical assets, 21% at second homes, and 18% at financial real estate products. HNI buyers are increasingly pursuing a dual objective, upgrading homes for self-use while also seeking rental income and long-term capital appreciation.

Return expectations have moderated, with 67% anticipating annualised returns of up to 15% and 33% expecting returns above that level. The survey also highlights a rising global outlook, with 16% of HNI and UHNI family members already settled overseas and growing interest in dollar-denominated assets, including investments routed through GIFT City. Overall, wealthy investors are consolidating their real estate portfolios and adopting a more strategic approach, with 20% now relying on professional advisors rather than making decisions independently or through local brokers, the survey showed.

Interest in second and holiday homes among HNIs and UHNIs remains strong, with 75% of respondents saying they purchased such a property in the past year, while 25% did not. However, the survey indicates that interest has softened compared to earlier periods as quality inventory becomes scarcer and prices move upward.

Among those who bought a second or holiday home in the past two years, farmhouses in city peripheries emerged as the most popular choice, accounting for 46% of purchases. Hill and mountain destinations followed at 33%, supported by improved road and highway connectivity and the ease of self-driven travel. Beach locations attracted 21% of buyers, while 7% opted for homes in spiritual destinations. Overall, farmhouses and villas within a 4-hour drive remain the most sought-after second-home options, the survey showed.

Commenting on the findings, Amit Goyal, Managing Director, India Sotheby’s International Realty, said, “The year 2026 opened on a note of quiet confidence after a defining year for India’s luxury real estate market. The momentum of 2025 was unmistakable, with listed developers reporting record sales and landmark transactions across Mumbai, Delhi-NCR, and lifestyle destinations such as Goa and Alibaug. Buyer composition also evolved meaningfully.”

“Alongside established business families, a new generation of wealth creators—startup founders, next-generation entrepreneurs, and senior professionals entered the market, supported by strong equity gains and a record IPO cycle. In 2025, 103 Indian corporates raised ₹1.76 lakh crore through IPOs,” he added.

The survey also underscores India’s robust wealth creation story. Prime urban luxury homes continue to outperform due to scarcity and defensibility, while second homes are evolving into lifestyle anchors rather than purely investment assets. “Looking ahead, while overall buying will remain cautious, prime urban luxury homes are set to outperform on scarcity. Proven micro-markets will continue to command lasting premiums,” said Ashwin Chadha, CEO, India Sotheby’s International Realty.