Wealthy Investors Optimistic About Real Estate Returns in India
Despite global headwinds, almost 67% of High Net Worth Individuals (HNIs) and Ultra High Net Worth Individuals (UHNIs) are still bullish on India’s growth story over the next 12-24 months. According to the annual luxury residential outlook survey by India Sotheby’s International Realty (ISIR), farmhouse properties remain the preferred choice for wealthy individuals seeking second homes, followed by hills and beach destinations.
As per the survey, 67% of wealthy investors expect annualised real estate returns of up to 15%. Meanwhile, 53% of buyers invested in luxury real estate for capital appreciation, while 47% purchased for self-use, highlighting a balanced demand mix. City-based residential properties remain the top choice among the wealthy, with 31% prioritising primary residences and 30% focusing on investment assets. However, interest in purchasing second homes has softened over the past year due to tightening quality inventory and rising prices.
The survey also highlights continued confidence in India’s property market, with a majority of respondents planning to maintain their allocation to real estate and look at new investments, though more selectively. Despite selective concerns around pricing and supply, investor sentiment remains resilient—particularly in the residential and premium housing segments—signalling a maturing market and more disciplined buyer behaviour.
The strong momentum witnessed in 2025, marked by record sales from listed developers and high-value transactions across Mumbai, Delhi-NCR, Goa, and Alibaug, has carried into 2026. Luxury homebuyers are increasingly prioritising quality, privacy, design excellence, wellness, and service-led living over scale and speculation. Buyer composition has evolved, with a new generation of wealth creators—startup founders, next-generation entrepreneurs, and senior professionals—entering the market, supported by strong equity gains and a record IPO cycle.
In 2025, 103 Indian corporates raised INR 1.76 lakh crore through IPOs. For these buyers, real estate offered permanence, blending capital efficiency, lifestyle value, and generational continuity. Demand increasingly favoured quality over scale, with privacy, design, wellness, and service-led living defining a more refined luxury market. 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.
India’s growth and wealth creation have moved in lockstep, powering a strong and sustained boom in luxury real estate—backed by resilient capital markets and rising income formalisation. With over 350 billionaires controlling nearly USD 2 trillion in wealth, demand for bespoke residential assets remains structural, not cyclical. 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.
While optimism remains strong, expectations have moderated. At the same time, currency volatility has emerged as a concern, with a significant share of HNIs and UHNIs concerned about the rupee’s depreciation against the dollar and actively exploring diversification into dollar-denominated assets. Investment preferences continue to favour equities, closely followed by real estate in physical form. The rapid adoption of AIFs, REITs, and InvITs has made real assets the largest combined investment pool for wealthy Indians. Real estate buying over the last two years has been evenly split between self-use and investment, reflecting a balanced approach to lifestyle upgrades and long-term capital appreciation.
Looking ahead, sentiments suggest a moderation in luxury residential price momentum in FY 2026–27, with over half of respondents expecting the market to cool slightly. Despite this, investment appetite remains resilient, with a majority indicating plans to maintain or increase their allocation to real estate—particularly city-based luxury homes that offer rental income and long-term value. More than half of respondents are considering streamlining their real estate holdings, and an increasing number are relying on professional advisors rather than making solo investment decisions or being guided by local brokers.
