Luxury real estate is emerging as a strong hedge against inflation amid market volatility - Experts' insights
Luxury real estate is high in demand. Many see luxury real estate as a strong hedge against inflation, thanks to its ability to retain value over time. High-demand properties in prime locations not appreciate, but outpacing inflation. Additionally, real estate investments also has income-generating potential through rental yields, making it a stable, long-term investment during economic uncertainty.
As inflation erodes the value of traditional currency, luxury properties not only retain value but also appreciate in value, helping investors to create wealth. According to JLL, India’s luxury homes dominated the real estate market in 2024. It accounted for more than 50 per cent of the sales.
Stable Return Amid Inflation
Pavan Kumar, founder & CEO, White Lotus Group, said that luxury real estate is increasingly emerging as a reliable safeguard in uncertain economic times, offering stability amid inflation and market fluctuations.
“High-end properties are seen as bespoke assets as they come with exclusive amenities, making them highly appealing to investors and buyers. Also, the limited supply of such properties, particularly in prime locations, makes it less prone to the price volatility. While stocks and bonds see declines during periods of market instability, luxury real estate offers a more stable investment option,” he said.
“For many wealthy investors, it serves as a safe haven, providing portfolio diversification to minimise risk. High-end properties yield steady rental income. In prime areas and sought-after locations, prime properties further enhance their role as a hedge against inflation,” Kumar said.
Branded Homes In India
A recent report by Jones Lang LaSalle noted that branded residences in India are priced 30-40 per cent higher than comparable non-branded properties in the same locations. For those focused on long-term wealth preservation, luxury real estate is much more than a lifestyle statement.
Ashish Bhutani, CEO, Bhutani Infra, said that India’s luxury real estate market, particularly in high-growth areas like Noida and Delhi, has seen significant appreciation. Along with housing, premium office spaces, retail complexes and mixed-use developments are also seeing a surge in demand. “Commercial properties located in prime business districts offer long-term rental yields and capital appreciation, creating demand among the HNI community. Beyond financial security, luxury real estate offers exclusivity, premium amenities and a future-ready lifestyle. As inflation continues to impact global economies, high-net-worth individuals are turning to real estate as a stable and appreciating asset,” Ashish said.
