As per Knight Frank’s, The Wealth Report 2021, 1 out of 5 of India’s ultra-high-net-worth individuals (UHNWIs) plan to buy a new home in 2021 compared to 1 out of 10 in 2020.
By Varun Singh
1 Out of 5 India’s Ultra-High-Net-Worth Individuals (UHNWIs) plan to buy a new home in 2021 compared to 1 out of 10 in 2020.
The preferred investment locations for the ultra-wealthy Indians are largely concentrated in the domestic market, followed by preferences in international markets of USA, UK, Singapore and the UAE.
26% of the UHNWIs, globally, also plan on purchasing a home in 2021, up against 20% of 2020.
The pandemic-induced residential mini-boom is expected to continue through 2021. Knight Frank estimates this demand to fuel price rises of up to 7% this year for key markets globally.
As per the Wealth Report 2021, there is a rise in the number of UHNWIs in India who intend to purchase a new home in 2021.
purchases. The COVID-19 pandemic has also influenced attitudinal shifts in residential purchase, with the emergence of coastal and ski destinations as new preferred locations globally.
However, in India, 41% of the UHNWIs are more likely to purchase a new house in resorts/coastal area.
COASTAL AREA MAKES A PREFERRED LOCATION FOR PROPERTY PURCHASE THAN SKI DESTINATION:
Resort/Coastal Area | Ski Destination | |
More | 41% | 13% |
Less | 36% | 38% |
No change | 23% | 49% |
In terms of attributes while choosing a new home, transport links, internet connectivity/technology and leisure facilities/amenities within the home/development closes by are of prime importance to the Indian UHNWIs.Office and logistics emerged as the top two real estate sectors of interest to the UHNWIs for investments in India, while globally it was the residential private rented sector and logistics which are the top two asset classes of choice.
Indian UHNWIs have 17% of their wealth allocated to property investments compared to 21% globally.
PROPERTY INVESTMENT PORTFOLIO: PROPORTION ALLOCATED TO EACH PROPERTY TYPE
Sectors | India |
Office | 31% |
Residential | 26% |
Retirement | 9% |
Development Land | 7% |
Retail | 6% |
Agricultural | 5% |
Industrial | 5% |
Logistics | 4% |
Hotels and leisure | 3% |
Other | 2% |
Healthcare | 2% |
Education | 1% |
Student housing | 1% |
Infrastructure | 0% |
Shishir Baijal, Chairman and Managing Director, Knight Frank India said, “The year 2021 looks promising for real estate in the Indian market. With several Government reforms, the residential market started to show recovery in the last two quarters of 2020. Knight Frank believes that as the Government continues to announce positive policy changes, global investors will be favourably disposed towards real estate. As India makes an economic recovery, it will require commercial assets to optimizethe productivity of employee workforce and efficiency of manufacturing operations, making it a lucrative asset class.”
“As we move further in 2021, ESG is likely to gain prominence as an influence in the property purchase. Though at a nascent stage in India, our survey reveals UHNWIs have cited a preference for environmental, social, and governance (ESG) focused property investments. With more awareness of the ESG concept, property conceptualisation on this aspect will gain preference in Indian residential/ commercial market.”
Shishir Baijal, Chairman and Managing Director, Knight Frank India
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