By Arpit Bansal
For decades, real estate has been an essential aspect of wealth generation in India. Nevertheless, investor interest has been piqued by a new segment – premium real estate. Factors like altering customer expectations, rising disposable incomes and evolution in lifestyle preferences significantly contribute to this shift. The high-value properties, usually situated in prominent areas and outfitted with opulent amenities, are not solely about status or comfort. Instead, they are a tangible and appreciating asset class, offering both strong financial returns and lifestyle value. Moreover, according to India Sotheby’s International Realty’s survey of wealthy people, more than 60 per cent of high-net-worth individuals (HNIs) and ultra-HNIs plan to invest in real estate during the next two years.
Even during market slowdowns, premium properties, such as a gated villa in Pune, a high-rise condominium in Bengaluru, or a sea-facing apartment in Mumbai, tend to maintain their value. Their resilience to volatility is a result of the demand they generate, which is fuelled by both end-users and high-net-worth tenants. Additionally, the rise of hybrid and remote work cultures has turned the investment in premium real estate not only desirable but also strategic. Following this, Mordor Intelligence has predicted that the premium real estate market size in India will reach USD 118.30 billion by 2030.
Yet, premium real estate remains a distant dream for many people. This is because of their perception of high initial costs, despite its numerous perks. What mostly goes unobserved is that investing in premium property is both financially prudent and feasible with the right financing strategy. Let’s navigate now:
Significance of Real-Estate Financing
Real estate financing refers to the methods used to fund a property purchase. This is particularly to situations when paying the full amount upfront isn’t feasible. In premium segments, choosing the right financing structure can make a significant difference in both affordability and return on investment.
Personal Financing: The Ultimate Alternative
Personal loans can complement the property investment strategy in specific ways:
- Down Payments & Top-Ups: When an individual falls short on the margin money or wishes to avoid liquidating investments, personal loans offer a quick solution.
- Faster Disbursals: Personal loans involve minimal paperwork and are often approved within 24–48 hours. This is helpful in those cases when acting quickly is crucial in a competitive market.
- No Collateral Required: Personal loans are unsecured. This implies that an individual doesn’t need to pledge the property or another asset. This, in turn, makes them ideal for flexible, smaller-scale funding.
- Short-Term Needs: For renovations, interior upgrades, or furnishing a premium home, a personal loan allows targeted spending without impacting your mortgage.
While personal loans have slightly higher interest rates and shorter tenures (typically 1–5 years), their flexibility and speed make them a useful tool in the premium real estate financing mix, especially when used strategically alongside other funding sources.
On the whole, premium real estate is not inaccessible; it simply necessitates more strategic planning. Even high-value property can be integrated into an individual’s long-term wealth strategy through the use of a combination of agile personal finance products and informed timing. The critical factor is to view real estate financing as a tool, rather than a burden. It should be regarded as the entity that transforms aspiration into ownership and ownership into enduring value.
(The author is the Director and CEO of La Wisteria)
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