Sustained demand for upscale properties aided by consistent expansion of the economy and rising prices has catapulted Mumbai, the country’s financial capital, into the world’s top 10 luxury real estate markets.

India’s largest and most expensive property market now ranks 8th as against 37th position just a year ago in 2022 supported by 10% on-year growth in terms of annual luxury residential price rise, showed Knight Frank’s wealth report 2024. Global luxury residential markets registered an average price rise of 3.1% in 2023.

Property market of Delhi ranked 37th with an annual price rise of 4.2% YoY in 2023 as compared to 77th rank in 2022. Bengaluru stands at 59th rank compared to 63rd in 2022 recording a 2.2% increase.

“India’s luxury residential market has shown remarkable growth…Mumbai’s ascent to the 8th rank globally, with a staggering 10% on-year increase in luxury residential prices, underscores the city’s enduring appeal. While Mumbai logged into the top 10 league among PIRI 100 cities, Delhi and Bengaluru also demonstrated positive momentum by improving their ranks,” said Shishir Baijal, CMD, Knight Frank India.

According to him, the outlook for 2024 remains bright as Mumbai with a 5.5% prime price growth forecast, ranks second among the 25 cities globally.

“At the start of 2023, economists were expecting a much weaker outcome across global residential property markets. Stock markets were heading for more pain, inflation was veering out of control and the pandemic-fuelled property boom was set to end in tears as borrowing costs hit 15-year highs in some markets. However, that never happened – we’ve seen a much softer landing in terms of price performance around the world,” said Kate Everett-Allen, head of international residential and country research at Knight Frank.

All the three key Indian cities–Mumbai, Bengaluru, and Delhi–have recorded a reduction in space purchase for $1 million or Rs 8.29 crore. With $1 million, one can now buy 1,109 sq ft space in Mumbai, 2,336 sq ft in Delhi and 4,058 sq ft in Bengaluru.

Monaco continues its reign as the world’s most expensive real estate market where $1 million can buy 172 sq ft, followed by Hong Kong 237 sq ft and Singapore sq ft 344 sq ft in 2023.

Of the 100 luxury residential markets tracked, 80 recorded positive-to-neutral annual price growth. Manila with 26% growth leads the rankings while Dubai, last year’s frontrunner slipped one spot despite 16% price rise.

The Bahamas with 15% rise comes in third place with Algarve and Cape Town both with 12.3% increase completing the top five, according to Knight Frank’s Wealth Report 2024, the value of Prime International Residential Index (PIRI 100).

According to the report, around 32% wealth of India’s ultra-high-net-worth individuals (UHNWIs) with a net worth of $30 million and above, is allocated towards residential real estate asset class.

“The expanding cohort of wealthy individuals looks favourably on real estate. Globally, almost a fifth (19%) of UHNWIs plan to invest in commercial real estate this year, while more than a fifth (22%) are planning to buy residential. Growth over the forecast period provides various opportunities for investors, particularly developers able to deliver property that suits the shifting tastes of the newly minted,” said Liam Bailey, global head of research, Knight Frank

Nearly 14% of their residential portfolio is allocated outside India and about 12% of India’s UHNWIs plan to buy a new home in 2024. A similar percentage of wealthy individuals in India purchased a new home in 2023.

Globally, 22% of the ultra-wealthy are expected to purchase a home in 2024. The report further highlighted that on an average an Indian UHNWI owns 2.57 homes while a sizable 28% have rented out their second homes during 2023.

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