Demand for luxury residential real estate is expected to moderate in 2026–27, with nearly 56 per cent of high-net-worth individuals (HNIs) and ultra-HNIs anticipating a cooling market by FY27, according to a survey by India Sotheby’s International Realty (ISIR). While sentiment towards luxury housing has turned more cautious, investor confidence in India’s broader growth story remains resilient, with equities continuing to top preferred investment avenues, followed closely by physical real estate.

When asked about the outlook for the luxury residential real estate market in 2026–27, as many as 56 per cent of HNI respondents expected a moderation, while 44 per cent did not.

The real estate consultant conducted a survey of nearly 700 high-net-worth individuals (HNIs) and ultra-HNIs to assess their sentiments towards India’s economic growth prospects, investment strategies, and outlook for the luxury housing market.

In its latest report, ‘The India Luxury Residential Outlook 2026’ released on Jan 25, India Sotheby’s International Realty (ISIR) mentioned that as many as 67 per cent of HNIs and UHNIs remain firmly bullish on India’s growth story despite global headwinds.

As per the report, nearly 57 per cent of respondents said they plan to continue investing in real estate during the period, though in a more selective manner, while 43 per cent indicated they would stay away.

Equities continue to dominate preferred investment avenues, with 67 per cent favouring stocks, followed closely by physical real estate at 64 per cent. Commodities (28%) and financialised real estate products such as AIFs, REITs and InvITs (22%) are also gaining traction, underscoring the growing role of real assets in wealthy portfolios, the survey showed.

Among those planning to invest in real estate, city-based residential property remains the top choice. About 31 per cent are looking at primary residences, 30 per cent at investment-grade physical assets, 21 per cent at second homes and 18 per cent at financial real estate products.

HNI buyers are increasingly pursuing a dual objective, upgrading homes for self-use while also seeking rental income and long-term capital appreciation.

Return expectations, however, have moderated, with 67 per cent anticipating annualised returns of up to 15 per cent and 33 per cent expecting returns above that level. The survey also highlights a rising global outlook, with 16 per cent of HNI and UHNI family members already settled overseas and growing interest in dollar-denominated assets, including investments routed through GIFT City.