India's residential real estate market, particularly the luxury segment, is undergoing a dynamic transformation. Both Indian residents and Non-Resident Indians (NRIs) are actively driving this growth, fueled by changing lifestyle preferences, rising incomes, and innovative investment models like fractional ownership real estate.
Luxury Residential Real Estate: A Preferred Asset Class
According to the Knight Frank 2024 Wealth Report, ultra-high-net-worth individuals (UHNIs) in India allocate 32% of their investment portfolios to residential real estate. This reflects the growing appeal of luxury properties among affluent Indian residents and NRIs.
For NRIs, real estate investment in India is more than just an asset; it’s a means to stay connected to their homeland. NRI investment in India has surged in recent years, particularly in residential real estate, with their share increasing from 10% in FY 2019-2020 to about 15% today. Experts project this figure could reach 20% by 2025, driven by the desire to secure appreciating assets and maintain ties to India.
Luxury properties appeal to these investors because they offer high rental yields, potential for long-term appreciation, and easier resale compared to commercial properties. For Indian residents, such properties are a chance to upgrade their lifestyles, enjoying premium amenities in metropolitan hubs or serene suburban locations.
Key Factors Driving Growth in Residential Real Estate
Urbanisation and Rising Disposable Incomes: Rapid urbanisation and increasing incomes have increased demand for high-quality housing. As more people migrate to urban centres for better opportunities, the need for luxury residences has grown exponentially.
Fractional Real Estate Investing: The emergence of fractional ownership platforms is revolutionising the market. Fractional property investment allows individuals to own a share of high-value luxury properties, making these investments more accessible. For NRIs, fractional real estate investing in India aligns with their aspirations to own luxury homes while enjoying the benefits of rental yields and appreciation.
Shifting Lifestyle Preferences: Today’s buyers seek homes that match their personal styles, prioritising modern designs, high-quality finishes, and world-class amenities. For NRIs, fractional real estate ownership in India enables them to diversify their portfolios while aligning with these preferences.
Regulatory Transparency: Policies like the Real Estate (Regulation and Development) Act (RERA) have enhanced transparency and accountability in the real estate sector. These measures boost investor confidence.Â
PropTech and Accessibility: Technology is bridging gaps in real estate investment. Platforms focusing on fractional real estate in India allow retail investors to enter the market with lower capital requirements. These platforms enable a seamless investment experience, offering access to luxury vacation homes and other premium properties.
The Role of Fractional Investing in Real Estate Trends
Fractional real estate investing has gained significant traction as a modern way to invest in the luxury residential market. Through fractional ownership real estate, Indian residents and NRIs can co-own properties, reducing individual financial burdens while enjoying collective gains. Fractional property investment also empowers small investors to participate in high-value assets, democratising the luxury real estate space.
Outlook for Residential Real Estate Investment in India
The luxury residential market is no longer a niche segment but a robust asset class with significant growth potential. With the rise of fractional ownership real estate in India, combined with technological innovations, this sector offers lucrative opportunities for both seasoned and first-time investors.
For NRIs, real estate investment in India provides a unique opportunity to blend emotional and financial objectives. By exploring avenues like fractional property investment, they can invest in appreciating assets while maintaining a strong connection to their homeland.
Conclusion
The confluence of factors like urbanisation, technological advancements, and the rise of fractional real estate investing in India is reshaping residential real estate trends. As the market evolves, platforms enabling fractional property investment will play a pivotal role in making luxury real estate accessible to a broader audience. For Indian residents and NRIs, now is an opportune time to explore these innovative investment models and reap the rewards of India's thriving luxury real estate market.