The Knight Frank Wealth Report 2025 has highlighted a significant shift in the preferences of next-generation Indian high-net-worth individuals (HNWIs), with luxury cars emerging as the most desired asset. The report revealed that 46.5% of Indian HNWIs, aged 18 to 35 with incomes exceeding $125,000, prioritise owning a luxury car over real estate, which is the second choice for 25.7% of respondents.
In the global survey, 29.8% of Next Generation High Net Worth Individuals (HNWIs) indicated a preference for high-end real estate, with luxury cars (27.8%) and private jets (15.1%) following closely behind.
India accounts for 3.7% of the global population of affluent individuals, ranking fourth behind the United States (905,413 HNWIs), China (471,634 HNWIs), and Japan (122,119 HNWIs).
Shishir Baijal, Chairman & Managing Director of Knight Frank India, emphasised the importance of understanding these shifting preferences. Baijal stated: "The next generation of wealthy individuals will play a pivotal role in wealth creation and economic growth. Consequently, their aspirations will be of paramount interest to the global luxury industry. As India’s ultra-high-net-worth population continues to expand, new opportunities will emerge for global luxury brands to establish a stronger presence in the Indian market. Sectors such as superyachts, in particular, remain largely untapped and hold significant potential for growth in India."
The Knight Frank Luxury Investment Index (KFLII) provides additional context, highlighting a dynamic but challenging landscape for luxury investments. According to the index, handbags were the top-performing luxury asset in 2024, appreciating by 2.8%. Despite a general downturn in the market, with the KFLII falling by 3.3%, this sector showed resilience. "The ultimate classic handbag, the Hermès Birkin in black Togo leather, is now more valuable than ever when sold on the secondary market," the report notes, indicating the enduring appeal and investment potential of certain luxury items.[3]
Liam Bailey, Global Head of Research at Knight Frank, commented on the overall performance of luxury collectibles, stating, "Luxury collectibles have delivered for investors over the long term. If you had invested US$1 million in 2005 and tracked KFLII, your investment would now be worth US$5.4 million. The same amount invested in the S&P 500 would have been worth US$5 million by the end of 2024." Bailey's insights highlight how luxury assets have historically provided robust returns, surpassing traditional financial investments in certain periods.
However, the report also details challenges within some sectors, such as fine art, wine, and whisky, which faced declines. Fine art saw an 18.3% drop, worse than during the Covid-19 crisis. The absence of Chinese buyers affected the fine wine market, which fell by 9.1%. Rare whisky also struggled, with values down 9% in 2024. These trends underscore the complexities of the luxury investment market, where changing consumer patterns and external factors can significantly impact value.