Indian ultra HNIs allocate 29 per cent of wealth to buy residential property in 2021

As per Knight Frank India’s Wealth Report 2022, 29 per cent wealth of Indian Ultra HNIs those with a net worth of USD 30 million or above is allocated towards purchase of primary and second homes in 2021.

Close to 30 per cent of total wealth of Indian ultra-high-net-worth individuals (UHNWIs) was used up to purchase residential properties last year, according to property consultant Knight Frank.

Property consultant Knight Frank India in its survey, Wealth Report 2022, said that 29 per cent wealth of Indian UHNWIs, with net worth of USD 30 million and above, is allocated towards purchase of principal and second homes in the year 2021.

Further, 22 per cent of UHNWIs’ investable wealth was allocated towards direct purchase of commercial property (including rental property, offices etc.) while 8 per cent was allocated towards indirect purchase of commercial property (including REITs, funds, etc.).

The survey also cited that 8 per cent of the property portfolio was held overseas. The report conveys that 10 per cent of India’s UHNWIs plan to buy a new home in 2022.

Indian UHNWI prefer to invest in properties in the domestic market (home country India), followed by international markets of the UK, the UAE and the US.

Globally, 21% of the ultra-wealthy are expected to purchase a home in 2022.

On an average an Indian UHNWI owns 2.3 homes and 32 per cent of the Indian UHNWIs have rented out their second homes during 2021.

Knight Frank India Chairman and Managing Director Shishir Baijal 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 amidst the economic volatility.”

“The governing rules surrounding REITs are regularly updated to augment the scope of these investment instruments in India. Our survey indicates that the investor interest will remain stable in 2022. Interestingly investors showed preference towards assets such as Land Development, Healthcare, Retail and Logistics etc. ESG will continue to gain prominence as key influence in property purchase decisions in 2022,” Baijal said.