Mumbai and Delhi Among Top 5 APAC Cities for Luxury Real Estate Growth

Mumbai, November 22, 2024: India’s booming economy, robust infrastructure, and favorable policy environment have propelled its prime residential markets into the spotlight, according to Knight Frank’s latest report, Quality Life-ing: Mapping Prime Residential Hotspots. Alongside Vietnam and Thailand, India has emerged as a key player in Asia-Pacific (APAC) real estate, driven by its status as the fastest-growing large economy in the world.

APAC’s Resilient Prime Residential Market

The APAC region’s prime residential sector has demonstrated remarkable resilience, navigating both the pandemic and rising interest rates. Luxury property prices in the region increased for the sixth consecutive quarter, rising by 2.9% year-on-year (YoY) in Q3 2024. Markets like Manila and Tokyo led the surge, with price changes of 29.2% and 12.8% respectively.

India has claimed a prominent position in this growth story:

Mumbai: Ranked 3rd in APAC for annual luxury property price growth, with an 11.5% YoY increase. The city’s prime residential prices reflect the bullish investment sentiment in the Indian economy, aligning with record-high equity indices. Mumbai’s prime real estate is priced at an average of $953 per sq. ft., making it the 14th most expensive market in APAC. With $1 million, buyers can acquire approximately 103 sq. m of luxury property.

Delhi: Secured the 5th position, recording a 6.5% YoY growth in prime property prices. The city’s average price stands at $452 per sq. ft., ranking it as the 19th most expensive APAC market.

Bengaluru: Ranked 7th, with a 4.8% YoY rise in luxury property prices. The city offers prime real estate at an average of $255 per sq. ft., making it one of the more affordable luxury markets in the region.

India’s Economy: A Key Driver

India’s transition from an offshoring hub to a high-value destination for AI and blockchain innovation is redefining its global standing. With a projected 7.2% economic growth in FY 2025, India is fostering an environment conducive to premium real estate investments.

The residential market has witnessed unprecedented momentum, with Q3 2024 recording 87,108 unit sales, a 5% YoY increase. Notably, luxury real estate sales grew by a staggering 41% YoY during the same period, reflecting evolving consumer aspirations.

Global Appeal of APAC Prime Residential Markets

High homeownership rates and robust economic fundamentals characterize APAC’s housing markets. India boasts the third-highest homeownership rate in the region at 87%, trailing only Singapore (90%) and Vietnam (88%).

Kevin Coppel, Managing Director of Knight Frank Asia-Pacific, highlighted the region’s appeal:
“Affluent individuals are seeking prime residential hotspots that combine lifestyle benefits with financial security. APAC markets, including Singapore, Japan, and Australia, offer exceptional quality of life and infrastructure, making them magnets for global investors.”

The Road Ahead

Knight Frank’s Quality Life-ing report underscores Asia-Pacific’s status as a premier lifestyle and investment destination, ranking markets on indicators like economy, human capital, and quality of life. While Singapore, Australia, Japan, and Malaysia top the rankings, India is solidifying its position as an emerging powerhouse, offering compelling opportunities for luxury real estate investors.

As India’s economy expands and consumer preferences evolve, cities like Mumbai, Delhi, and Bengaluru are expected to remain pivotal in shaping the region’s prime residential landscape.