The real estate investment is no more just the idea of your town, city, or country. Even another country is not a sky’s limit. The thought has found resonance with a lot of Indian real estate buyers who are looking to invest in a property/buy a home outside India. These real estate buyers are just not the usual High Net Worth Individuals (HNI) which is what is revealing about the trend. So what is driving the growth?
The trend reported by various studies, suggest that the overseas real estate investments have risen from $1.9 million in 2005-06 to $111.9 million in 2016-17. The experts believe the idea of home has travelled and changed for the better as sound investment decisions are being made by the real estate buyers who are not limiting their choice when it comes to their dream home and putting in their hard-earned money. The availability of bigger and better properties at the same price as in India along with much brighter options has contributed to the trend.
For instance, an apartment in Dubai or an old villa in France or Germany may cost lesser than a bungalow in Delhi or a premium apartment in Mumbai. It is being seen as a considerable push and boost to people moving to foreign shores for jobs, studies, or even permanently.
The trend is not just restricted to the HNI segment with more people across the middle and upper middle class finding it lucrative to invest in apartments or villas in foreign locations. What many relate to foreign locations in the first place is picturesque apartments and old villas. But much like India and Indian set-up, there are residential apartments for sale that are being lapped up by various segments. While 68 per cent of the investors are businessmen, it is reported that 21 percent are traders or self-employed individuals.
However, this does not mean that HNI investments have reduced. They continue to grow in locations like Washington, Cyprus, Sri Lanka, New York, London, Dubai, Singapore, Australia and San Francisco, to name a few.
From rising social infrastructure, health facilities, tax-free and successful economy to proximity to India, Indians have various reasons to opt for such countries. In fact, it is said that Indians make up almost 25 percent of foreign investment in Dubai real estate market. The Global Indians have paved the way for international investments which are being seen as a positive sign for the real estate industries of the world. The Studio apartments, palm Jumeirah, and luxury beachfront villas are gaining popularity in locations like Dubai, say experts. Some of the most expensive properties in London’s prime locations including Mayfair and Knightsbridge are said to be owned by more than 3,000 Indian families. Moreover, in the next few years, the investment by HNI in United Kingdom is said to soar higher with annual investment around 1 million pounds.
Tracking the change
The buyers have changed. The options are varied. The choice is more. This has been the story of Indians looking to invest abroad. From a long-term economic decision to a short-term investment, the reasons are varied but the sentiments are alike.
The aspiration of having a second home and the need for investments has contributed to the growth of such investments. Helped by the Reserve Bank of India’s push to overseas investment from $ 1,25,000 to $2,50,000 and the affordability of homes owing to the pitting of the Indian currency against global currencies has impacted the trend.
The reforms on the part of the Indian Government have also had an impact. From RERA to the major economic decision of demonetization and curbing of black money has had an impact on the real estate in India which has shifted the focus of Indian homebuyers to options in other countries.
The nominal taxes, transparency, and efficiency without red tape are additional factors for the change. According to the several international real estate consultants, many of the Indian homebuyers are now spreading their wings and even taking risks with properties where prices are still rising.