Despite a moderated outlook on India’s economic growth, a significant 62% of High-Net-Worth Individuals (HNIs) and Ultra-High-Net-Worth Individuals (UHNIs) plan to invest in luxury real estate within the next 12-24 months, according to India Sotheby’s International Realty’s annual Luxury Residential Outlook Survey 2025.
While optimism about economic growth has dipped from 79% in 2024 to 71% in 2025, the enduring appeal of real estate as a stable, wealth-building asset remains evident. Most respondents continue to see India as the fastest-growing major economy, with GDP growth projections between 6% and 6.5%.
Capital Appreciation a Key Driver
Capital appreciation remains a pivotal factor for real estate investments, with 55% of respondents citing it as the primary motivation, an increase from 44% last year. Almost half expect returns between 12% and 18%, while 38% anticipate returns below 12%. Fewer than 15% expect returns exceeding 18%, reflecting tempered expectations after several years of robust market performance.
“India’s luxury real estate market is set for continued growth, albeit with cautious optimism,” said Amit Goyal, Managing Director of India Sotheby’s International Realty. “Demand for bespoke luxury assets, including spacious farmhouses and gated villas in hill and beach destinations, is expected to be a key trend in 2025.”
Surge in Second Homes and International Properties
The survey also highlighted growing interest in second homes, with 55% of respondents favoring properties within a four-hour drive for convenience. Popular choices include hill and beach destinations.
International real estate interest has risen notably, with 22% of respondents expressing plans to invest abroad, up from 10-11% historically. Dubai has overtaken London as the top global choice, followed by U.S. cities.
Luxury Real Estate as a Lifestyle and Investment Asset
Luxury real estate remains a preferred investment avenue for lifestyle upgrades and wealth creation. The number of UHNIs in India reached 13,600 in 2024, with a projected 50% increase by 2028. Rising affluence and the growing influence of young wealth creators under 40 are shaping the demand for high-end properties.
“Luxury real estate is no longer just a status symbol but a robust investment avenue,” said Ashwin Chadha, CEO of India Sotheby’s International Realty. “From self-built bungalows to high-rise apartments and gated villas, the segment has evolved to offer world-class amenities and assured quality.”
Broader Economic and Market Trends
Despite concerns over inflation, 71% of respondents expect interest rates to ease gradually. Meanwhile, 36% of HNIs plan to allocate surplus funds to real estate in the next two years, highlighting its role as a tangible asset amid market volatility.
As India’s luxury real estate market continues to evolve, it reflects the country’s growing wealth and aspirations, offering opportunities for both lifestyle enhancements and capital gains.
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