CNBC's Inside India newsletter: As India's rich venture abroad, many anchor fortunes in real estate

CNBC

20 hours ago

India's wealthy may be emigrating, but they are keeping a firm grip on their real estate investments in the country and abroad, a choice that's fueling a property boom in the luxury market.
In a recent newsletter, I explored how wealthy Indians are seeking other residencies abroad for strategic reasons, rather than a permanent relocation. According to Dhruba Jyoti Sengupta, CEO of Wrise Wealth Management Middle East, many of these high-net-worth individuals remain bullish on India and allocate around 80% of their investments domestically. A notable portion of this, he added, is going into real estate.
"Indians, by and large, have always had a cultural affinity for real estate," Himmat Singh, managing director of global luxury real estate agency Christie's International Real Estate, told me. "Traditionally, post-independence, there were limited assets for people in India to invest in and only a small portion of investors played in the market."
That legacy still shapes portfolios today, Singh said.
While definitions vary, individuals with a net-worth of 50 million to 250 million Indian rupees ($571,000 to $2,855,000) are typically considered high-net-worth, while those with more than 250 million Indian rupees are considered ultra-high-net-worth. Affluent individuals fall in the 10 million-50 million Indian rupees range.
For many, owning a property is a "cornerstone of wealth strategy," Wrise's Sengupta said, adding that it serves as both a financial asset and lifestyle statement. Owning residences abroad, whether for rental income, personal stays, or commercial units in which they can operate their businesses, also provides a global footprint.
India's uber-rich — defined as the top 1% of Indian households, or individuals earning the top 40% of income — held on to $11.6 trillion or 59.1% of all assets held by Indian households, according to data from investment house Bernstein.
Of this, $7.1 trillion, or 61.2%, is parked in real estate and gold, the same report indicated.
"Rich and poor Indians have historically relied on physical assets," such as gold, land and real estate to park their savings, Manas Agarwal, vice president and analyst at Bernstein, said.
The lure of real estate lies in long-term appreciation. These benefits typically outweigh the higher costs and lower liquidity associated with the asset class, experts told me.
The capital appreciation on real estate has more than doubled in value over the last four years, and many have made "a significant return," Christie's Singh observed.
The average wealthy Indian owns multiple types of real estate. Real Estate Investment Trusts (REITs) are becoming a popular instrument given their ability to "generate more predictable yields without the operational burden of direct property ownership," Wrise's Sengupta said.
Residential and commercial properties are also popular. In the first quarter of 2025, housing prices in India rose 7.7% from the year before, outpacing the U.S., U.K. and Australia.
Sales of luxury houses priced between 60 million and 500 million Indian rupees jumped 88% in the second quarter of the year compared with the same period in 2024, while the number of launches for such apartments grew 40% from the year before, a report by real estate firm CBRE showed.
While prices vary across cities, $1 million can buy 99 square meters of prime property in Mumbai, data from Knight Frank's latest Wealth Report shows. By comparison, the same amount is worth 32 square meters in Singapore, 34 square meters in London and New York, 44 square meters in Shanghai and 78 square meters in Dubai.
Within India, the rich typically own single-family homes, or a self-contained residential building for their daily occupancy, in major metropolises like Delhi, Mumbai or Bengaluru. Such homes are typically in a gated community and can cost at least 200 million Indian rupees for a 2,500 square feet unit in some parts of Delhi, Singh said.
Beyond this, they also invest in "palatial" country homes spanning around 1 to 2.5 acres (43,560 to 108,900 square feet) located outside the city, Singh suggested. He named Alibaug, a coastal town that is a two-hour ferry ride away from Mumbai, and Chhatarpur, a town that is a nearly three-hour flight away from Delhi, as destinations with such homes.
Homes in India, Singh said, are increasingly held over a five to 10 year period following a change in India's income tax rules where only gains of 100 million Indian rupees are exempt from capital gains taxes. This, he added, has resulted in less speculative investing and is a good move for the long-term stability of India's property market.
For property investments outside India, the wealthy consider functionality and long term returns Singh observes.
Dubai is a popular location given its strong rental yield of 6% to 7% as more companies relocate or expand there, he said. Other popular destinations include Ras Al-Khaimah in the UAE, an up and coming city that is set to generate substantial near-term gains, Thailand's Phuket and Koh Samui, where Indians visit to relax and unwind, as well as London, where many head to out of familiarity,
But it's not just real estate. The analysts I spoke to said that India's wealthy are also investing in other assets.
They are now looking beyond physical assets to capital markets, given "how strong they have been in the last few years," Bernstein's Agarwal said.
Private markets such as venture capital, private equity, and hedge funds have also emerged as a popular option with many wealthy individuals funding global start-ups to tap into the growth they will enjoy from increasing their total addressable market, Himanshu Kohli, co-founder of Indian multi-family office and private wealth manager at Client Associates, told me.
Cryptocurrency is also finding a place in portfolios, albeit at a small percentage of around 2%, as investors are betting on the bitcoin rally as a hedge against macroeconomic uncertainties, said Sengupta.
India's wealthy are also looking for opportunities outside the country.
"Ten years ago, wealthy Indians invested almost entirely at home. Today, it's India plus the world. India remains the growth engine, with capital flowing into companies, startups, and pre-IPO opportunities — but now, global investments in equities, private markets, and overseas property are built in early, not just at retirement," Sengupta noted.
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Kanika Pasricha, chief economic advisor at Union Bank of India, expected the government to announce measures to boost export-oriented sectors and reinforce its Make in India initiative.
Jim O'Neill, former U.K. Treasury Minister and Goldman Sachs Asset Management chairman and chief economist, discussed his reaction to new tariffs imposed by the Trump Administration on India and much more.
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The benchmark 10-year Indian government bond yield had fallen to trade at 6.4045%.
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