India's super rich put 17% of investable wealth in luxury items

New Delhi: The Indian ultra-rich allocate 17 per cent of their investable wealth towards luxury items, with maximum preference to watches followed by art and jewellery, according to Knight Frank.

In a virtual press conference, real estate consultant Knight Frank released The Wealth Report 2024, highlighting that 17 per cent of the investable wealth of Indian Ultra-high Net Worth Individuals (UHNWI) is allocated towards luxury or passion investments.

UHNWI are defined as individuals with a net worth of $30 million and above.

The joy of ownership has been cited in the survey as the prime reason for Indian UHNWIs for making investments into luxury assets, the consultant said.

Among Indian UHNWIs, luxury watches are the most coveted investment category, followed by art and jewellery.

Classic cars are at 4th position, followed by luxury handbags, wine, rare whisky, furniture, coloured diamonds, and coins.

However, on a global scale, the super-rich show their preference for luxury watches and classic cars.

Knight Frank India Chairman and Managing Director Shishir Baijal said in a report, 'India's affluent class has long shown a fondness for collectibles spanning various categories. With both domestic and global markets offering significantly higher returns for such items, India's ultra-wealthy are actively pursuing investment opportunities in areas aligned with their passions."

The demand for rare collectibles is on the rise across different age groups in India, he added. "As wealth continues to grow in the country, we can anticipate further investments in these asset classes," Baijal hoped.

According to the annual Knight Frank Luxury Investment Index (KFLII), which tracks the performance of 10 popular investments of passion, art was the best-performing luxury asset class with prices rising 11 per cent in 2023. "Despite witnessing a depreciation of 9 per cent in the last 12-month, over a longer period of 10-year, rare whisky continued to command its premium value registering 280 per cent returns," the report said.

Despite the major auction houses observing a year of record-breaking sales in the luxury investment market, the KFLII edged into marginal negative territory for the second time, declining 1 per cent in 2023.

This was because several constituents of the index dropped into the red zone or showed minimal gains.