A new generation of self-made ultra-rich Indians is investing in the country’s residential real estate, according to a study by property consultant Knight Frank.
About 29% more of India’s ultra-high-net-worth individuals (UHNWIs) purchased a residential property in 2021 compared with the previous year, Knight Frank said in its report.
Entrepreneurs are increasingly investing in second homes as the residential segment witnessed a sharp recovery after the outbreak of Covid-19. Currently, on average, an Indian UHNWI — a person with a net asset of $30 million or more — owns two homes.
Shishir Baijal, chairman and managing director of Knight Frank India, said: “Investment in the real estate sector in India has grown in recent times, especially in the wake of the pandemic, as real estate was viewed as a safe and tangible investment option amid the economic volatility. Further, at attractive valuations, real estate continued to drive institutional demand.”
According to property brokers, UHNWIs are actively looking to buy a new home in 2022.
These individuals prefer to invest first in domestic properties, followed by the markets in the UK, UAE and the US.
“We are seeing a 2x jump in the share of real estate in our UHNI clients’ overall investment portfolios. In the last two years, stocks have performed well and there has been a rise in salaries in the IT sector — both these factors have led to a good flow of investment in real estate since it’s considered the most stable and safest investment option,” said Bhavesh Kothari, founder of Property First, a luxury-property broking firm.
The club of self-made UHNWIs in India has been growing, amid a boom in the startup sector with many of these companies getting funding from venture capital firms and other investors at high valuations.
The number of UHNWIs in India has grown by 11% YoY in 2021, the report said. Among key Indian cities, Bengaluru witnessed the fastest growth in the number of UHNWIs: up 17.1% to 352 in 2021. The southern city was followed by Delhi (12.4% and 210) and Mumbai (9% and 1596).
India was ranked 3rd in terms of billionaires’ population in 2021, after the US and China, the report said.
“There is a clear indication that the desire to upgrade homes will be a big motivator in 2022 due to the ongoing hybrid work model. We are seeing an increase in enquiries and sales momentum. We have been witnessing strong sales momentum, especially in the last 12 months, with almost 90% sold inventory now,” said Ashwinder R Singh, CEO (residential) of Bhartiya Urban, a Bengaluru-based real estate development company.
According to an Orios Venture report, India saw 46 new unicorns in 2021, taking the number of such startups with a valuation of at least $1 billion to 90. Indian startups in 2021 raised $42 billion, up from $11.5 billion in 2020. One out of every 13 unicorns globally now was born in India.
Source : ET