The allure of luxury real estate as an investment avenue has captivated the imaginations of discerning investors worldwide. Its promise of opulence, exclusivity, and significant returns makes it an attractive option for those looking to diversify their portfolios. This asset class continues to attract investors across all levels, especially among affluent Indians. According to India Sotheby's International Realty's Luxury Outlook Survey for 2024, a significant 71% of wealthy individuals express a keen interest in investing in luxury real estate within the next 12-24 months.

According to Knight Frank's 'The Wealth Report 2023, India's ultra-high-net-worth individuals (UHNWIs), with net worth over $30 million, are estimated to grow by 58.4% from 12,069 in 2022 to 19,119 individuals in 2027 while India's billionaires are expected to grow from 161 to 195 by 2027.

As per Anarock Research, as many as 4,76,530 units were sold across the top seven cities in 2023, of which the share of luxury home sales priced >INR 1.5 crore stood at 25% comprising sale of approx. 1,19,130 units. "There has been a whopping 81% yearly jump in the number of luxury units sold in 2023-from approx. 65,677 units sold in 2022 to nearly 1,19,130 units sold in 2023," informs Anuj Puri, chairman, Anarock Group.

With the advent of boutique, tailored and ultra-luxury offerings, builders have also started catering to the lifestyle of affluent Indians, which adds another layer of desirability to luxury real estate investments. "Considering current market trends, it seems 10-15% of returns y-o-y can be expected in the future for luxury realty investments," estimates Shalin Raina, MD, residential services, Cushman & Wakefield.

Dr Niranjan Hiranandani, chairman, Hiranandani Group too perceives that investing in luxury real estate has become increasingly popular in recent years, with

many developers seeking to diversify their portfolios and capitalise on the potential returns within this specialised segment.

Anand Ramachandran, sr. vice president - business expansion, Prestige Group expresses that the discerning luxury homebuyer seeks a developer of repute offering a development with a distinctive design language in a celebrated address with modern amenities. "Mumbai continues to be the luxury capital of the country and the recent report citing Mumbai as the new billionaire's capital of Asia further confirms the purchasing power and demand for luxury," apprises Ramachandran.

For instance, a luxurious project 'Prescon Midtown Bay'at Mahim, Mumbai reflects and fulfills the aspirations of its homebuyers. "The 2, 3 BHK sky condos offer panoramic and uninterrupted views of the Bandra-Worli Sea link and Arabian Sea coupled with unmatched connectivity to all parts of Mumbai," proclaims Vedanshu Kedia, director, Prescon Group.

As a preferred developer for HNIs and UHNIs, Vaishnavi Group is at the forefront of developing state-of-the-art luxury residential properties in Bengaluru.

"Over the next decade, we are looking to significantly increase our portfolio of luxury properties in the city to cater to the burgeoning demand," divulges Darshan Govindaraju, director, Vaishnavi Group.

Investing in luxury real estate in dynamic regions like Delhi-NCR, too proves to be a wise decision with enduring potential. "In Delhi-NCR, the demand for luxury properties remains robust for several reasons. The area's stature as a prominent economic centre, coupled with the presence of multinational corporations, draws in HNIs in pursuit of top-tier housing options" affirms Amarjit Bakshi, CMD, Central Park.

Investors are increasingly drawn to luxury real estate also in tier-2 cities like Moradabad, Lucknow and Ayodhya, especially with the trend towards remote work, making work-from-home a viable option. "These tier-2 cities offer lower land values and higher profit margins, attracting investors," states Pyush Lohia, director, Lohia Global.

Over time, these properties can

appreciate significantly, offering lucrative returns on investment. "These properties can generate substantial rental income, particularly when marketed to affluent tenants or as high-end vacation rentals," expresses Chirag Mehta, founder, Arbour Investments.

India has a strong track record of weathering global economic uncertainty, making it an appealing destination for real estate investments. "Non-resident Indians (NRIs) have been channelling their. foreign currency reserves into the thriving luxury real estate sector in India, which is expected to peak in 2024," puts in Rakesh Reddy, director, Aparna Constructions.

There has been growing interest in luxury holiday homes in recent times. "With the rise of remote work and an increased focus on lifestyle, more individuals are seeking second homes in picturesque locations for vacationing and relaxation," avers Aditya Kushwaha, CEO and director, Axis Ecorp.

Now what counts in luxury realty investment is an investment approach with strategic thinking. "Through careful selection of residence in the fast-changing investment landscape, your investments will evolve to keep pace with the timeless trends and give you an edge in achieving meaningful long-term returns," proposes Aman Gupta, director, RPS Group.

Yet, the decision to invest in this segment requires a nuanced understanding of its benefits. "Thorough research, professional advice, and a long-term perspective are key to attaining success in this market segment," enlightens Shivam Agarwal, VP-strategic development, Sattva Group.