Investing in Luxury Real Estate

Luxury real estate seems to be having a moment. It’s quickly emerging as a hot favourite among new and millennial home buyers, especially post-COVID. Investments in high-value properties have been safe during COVID, proving that this sector is firmly secure in an investment bracket that’s shock-proof. In a time of great uncertainty, this comes as huge relief.

All set to boom in 2022 – 23, the luxury real estate sector is reaping the benefits of low-interest rates, prompting discerning investors to opt for easily available loans to invest in properties of high value.

Millennials, especially, are tech-savvy, high-income individuals who like the good life. They are keen to park their money in green and environmentally-friendly luxury properties that comply with ESG norms and adhere to more responsible building practices. On the lookout for their dream home that ticks all the boxes when it comes to a superior quality of life, world-class amenities and a coveted address, millennials are more likely to invest a significant chunk of money in a single luxury real estate property as opposed to splitting it among several properties.

67% of HNIs are looking to invest in luxury homes
– Southeby’s Realty

Luxury real estate is a smart, safe investment if it’s timed right. The pandemic has accelerated HNIs’ desire for homes that are closer to nature and designed to facilitate an ambience of luxury and sophistication.

WFH and subsequent lockdowns have resulted in greater disposable income, more savings, leaving techies with more money in hand to invest in real estate. Increased supply for talent has also meant higher salaries, promotions, ensuring that well-travelled millennials can afford to invest in luxury properties that are reflective of the kind of lifestyles they want to lead.

Benefits of investing in luxury real estate

In addition to location and exclusivity, luxury real estate has a number of other major advantages, including:

An exceptional location without parallel
High quality kitchen, sumptuous bathrooms, spacious study, opulent bedrooms, and expansive living / dining areas to entertain
Top-of-the-range amenities such as an infinity pool, wine cellar, fitness room, home theatre, etc.
A strong positive emotional charge (wonder, pride, enthusiasm)

This is why, although luxury properties attract a huge initial investment, they generate excellent rental yield for the investors. Known to be a profitable investment, which continually increases in value, it can unlock greater financial security for investors.

Moreover, the arrival of new rich people in search of beautiful properties in the best places makes this market even more attractive. After all, we’re always reading about how stars, business people, and industrialists are selling their properties at a much higher value than at the time of acquisition.