FOMO and Market Volatility Drive Wealthy Indians to Ultra-Luxury Homes

The Indian real estate market, particularly the ultra-luxury segment, is witnessing a surge in demand driven by factors like fear of missing out (FOMO) and concerns about market volatility. Wealthy individuals are increasingly drawn to ultra-luxury homes as they perceive them to be more stable investments amidst economic uncertainties.

Understanding FOMO in Luxury Real Estate

Research conducted by real estate services firm ANAROCK sheds light on the mindset of affluent Indians regarding property purchases. There is a notable FOMO phenomenon among the ultra-rich, driving them to secure the most sought-after properties before others. This sense of urgency contributes significantly to the rising interest and transactions in the ultra-luxury segment.

Exponential Growth in Ultra-Luxury Home Sales

ANAROCK’s data reveals a staggering 247% annual increase in the total sales value of ultra-luxury homes in 2023 compared to the previous year. As of now, 58 ultra-luxury homes have been sold across the top 7 cities in India, amounting to approximately ₹4,063 crores. This is a substantial leap from the 13 homes sold in 2022 for around ₹1,170 crores.

Anuj Puri, Chairman of ANAROCK Group, highlights this significant growth, stating that 2023 has already made history in Indian real estate due to the unprecedented surge in ultra-luxury property sales.

Preference for Apartments and Investor Profiles

Among the ultra-wealthy individuals, apartments remain the preferred property type, accounting for 53 out of 58 deals. Business professionals constitute the majority of buyers at 79%, followed by senior executives from diverse sectors at 16%. Notably, politicians and Bollywood celebrities also contribute to this trend, representing 5% of ultra-luxury property transactions.

Market Reshuffling and Stability

The spike in luxury home sales is intertwined with the reevaluation of investment strategies by High Net Worth Individuals (HNIs). Concerns about potential stock market volatility, exacerbated by geopolitical tensions, have led to a strategic shift towards more stable asset classes like ultra-luxury real estate. Developers are responding to this demand by introducing more properties in this segment, catering to the growing appetite for secure investments.

Post-Pandemic Demand for Luxury Residences

The pandemic has further fueled the demand for luxury and ultra-luxury residences. HNIs and ultra-HNIs perceive these homes as not only lucrative investments but also as havens of comfort and security, making them an attractive option for both financial diversification and personal enjoyment.