UHNIs are riding a home-buying wave

New money from self-made ultra-high-net-worth individuals (UHNIs) is finding its way into the country’s residential real estate and has made a very strong comeback since the onset of the pandemic.

These individuals are investing in second homes as the residential segment witnessed a sharp recovery post the pandemic in the country. Currently, on average, an Indian UHNWI owns over two homes, and approx. 32 per cent of the Indian UHNWIs are settled in India.

The Indian real estate sector bore the weight of the pandemic, with the luxury home segment hit the hardest. However, this segment was the fastest to bounce back, too, with demand outpacing the supply. The impact of the omicron wave was quite limited, the market rode on the twin momentum of the ongoing low-interest rate regime and attractive pricing offered by developers.

In Q1 2022, one of the trends observed is the rise in sales for bigger ticket sizes, with apartments priced over Rs 1 crore or higher recording an on-year 83 per cent growth in sales. Bengaluru especially clocked the highest-ever quarterly sales. The sales performance of property markets of Bengaluru and Mumbai have helped the residential apartment market in India record sales of close to 52,000 units in the January-March 2022 quarter, up 148 per cent over pre-Covid-19 average levels, stated a JLL India report.

Investment in the real estate sector in India has grown in recent times as it was viewed as a safe and tangible investment option. In the last two years, stocks have performed well and also 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.

The expectations of the next boom in real estate are also driving investors back into the sector as they expect healthy appreciation in strategic micro-markets like North Bengaluru. There is now a growing demand for larger homes that provide a healthy lifestyle and bring people closer to nature.

— Bhavesh Kothari, founder & CEO of Property First. Views of the author in this article are personal.

Times Property