India’s economic upswing has not only propelled its growth but has also reshaped the luxury investment landscape, with the country’s wealthiest increasingly turning to high-end collectibles. According to the ‘Wealth Report 2024’ by Knight Frank, 17% of India’s ultra-wealthy have invested in luxury items, with a pronounced penchant for watches, art, and jewelry. This diverges from the global trend, where art typically dominates the luxury investment sphere. Real estate continues to hold its ground as a preferred investment, drawing 32% of affluent Indian investors.
Luxury Watches and Art Take Center Stage
The allure of luxury watches has captivated India’s super-rich, making them the top investment choice within the realm of high-end collectibles. The Knight Frank report underscores the burgeoning interest in art and jewelry as well, positioning them as significant contenders in the luxury investment arena. This preference starkly contrasts with global patterns, where art generally leads as the primary luxury asset. The report reveals that classic cars, luxury handbags, wine, rare whisky, furniture, colored diamonds, and coins also find their place in the investment portfolios of India’s ultra-high-net-worth individuals (UHNWIs), albeit with watches leading the pack.
Real Estate Remains a Pillar of Wealth
Despite the magnetic pull of luxury collectibles, real estate remains a cornerstone for India’s affluent, with 32% of UHNWIs channeling their investments into property. The report anticipates a 50% surge in the number of UHNWIs in India over the next five years, substantially outstripping the global average. This growth is expected to further stimulate the luxury real estate market, both domestically and internationally. Interestingly, the average Indian UHNWI owns 2.57 homes, with a significant portion of these properties located outside India, reflecting a diversified approach to real estate investment.
Market Dynamics and Future Outlook
While the Knight Frank Luxury Investment Index (KFLII) experienced a slight decline of 1% towards the end of 2023, experts view this as a potential market correction rather than a cause for alarm. Art emerged as the highest-performing luxury asset class, with an 11% price increase in 2023, while rare whisky continued to enjoy premium valuation, yielding 280% returns over a decade. Despite a year marked by record-breaking sales at major auction houses, the luxury investment market witnessed some constituents dipping into the red or achieving minimal gains. However, the overall sentiment remains positive, with luxury investments in India showing promising prospects.
The shift towards luxury collectibles among India’s ultra-rich not only highlights a diversification in investment preferences but also underscores the growing economic confidence among this demographic. As India’s economy continues to flourish, the landscape of luxury investments is poised to evolve, potentially setting new trends on the global stage.
