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India's Rich Shifting Real Estate Strategy
26 Jan
Summary
- HNIs and UHNIs are becoming more selective in luxury real estate purchases.
- Real assets, including physical real estate and AIFs/REITs, now form largest investment pool.
- Second home demand has softened due to rising prices and opportunity costs.
High-net-worth and ultra-high-net-worth individuals in India are exhibiting a more discerning approach to luxury real estate, with buying decisions becoming increasingly strategic and data-driven. While overall demand for prime urban properties remains robust, a notable cooling is anticipated in the luxury housing market for the 2026-27 period, following a surge in previous years.
Equities continue to lead investment portfolios, but when combined with physical real estate, AIFs, REITs, and InvITs, real assets now constitute the largest segment of wealth. This signifies a significant trend towards real asset allocation among wealthy investors.
Demand for second homes has softened considerably. Factors such as rising prices, a tightening of quality inventory, and higher opportunity costs are tempering discretionary purchases. Farmhouses near city peripheries are the preferred alternative for those still acquiring secondary properties.
Wealth management strategies are also evolving, with a majority of HNI and UHNI investors considering portfolio consolidation. There is a clear move towards institutional-style portfolio management, with a strong reliance on professional advisors and family offices for real estate decisions.
