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Residential realty is being driven by the ultra-rich

According to a survey by property consultant Knight Frank, a new generation of self-made ultra-rich Indians is investing in the country’s residential real estate. India’s ultra-high-net-worth individuals (UHNWIs) purchased a residential property at a 29% higher rate in 2021 than the previous year, Knight Frank said in a report.

Entrepreneurs are increasingly investing in second homes, as the residential sector has rebounded sharply since the Covid-19 epidemic. An Indian UHNWI – a person with a net worth of $30 million or more – currently owns two homes on average.

Shishir Baijal, 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.”

UHNWIs are actively looking to buy a new home in 2022, according to property brokers. These individuals choose to invest in domestic properties first, followed by the UK, UAE, and the US markets.

“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 number of self-made UHNWIs in India has increased, owing to a surge in the startup industry. Many of these businesses receive high-value funding from venture capital firms and other investors. According to the report, the number of UHNWIs in India will increase by 11% in 2021. Bengaluru saw the fastest increase in UHNWIs among major Indian cities, rising 17.1% to 352 in 2021. Delhi (12.4 % and 210) and Mumbai (12.4 % and 210) came in second and third, respectively (9% and 1,596).

After the US and China, the report said that India was ranked 3rd in terms of billionaires’ population in 2021. “There is an indication that the desire to upgrade homes will be a big motivator in 2022 due to the hybrid work model. 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.

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