Indians snap up realty abroad, make up 25% of deals by foreigners in Dubai
As prices rise back home, Italy, Spain, Thailand, Singapore draw more attention from high-net-worth desis because of incentives, lower mortgage rates too.
More Indians than ever are buying real-estate in international markets.
Desis were the biggest buyers, in terms of volumes and values, in Dubai last year, buying up the equivalent of Rs 208 billion worth of property across 6,263 investors, according to statistics released recently by the Dubai Land Department.
The DLD report says Indians accounted for 25% of all transactions, and were the leading foreign investors in the first half of 2017, followed by the Pakistanis, British, Chinese and Canadians.
“The factors driving such interest are not hard to identify — $1 million (about Rs 6.3 crore) would get an investor a mere 1,000-sq-ft flat in Mumbai, while the same sum in Dubai will fetch you at least 50% more,” says Anuj Puri, chairman of Anarock Property Consultants. “As prices in India rise, Indian property investors in the upper income brackets are increasingly exploring real estate options abroad. While Dubai is the most preferred destination because costs are relatively low, other emerging destinations include Kuala Lumpur and Singapore,” says Puri.
International markets are attractive to different grades of buyers at different price points, adds Ramesh Nair, CEO and country head for JLL India.
“Indians have a traditional affinity for real estate and higher incomes and globe-trotting jobs have opened up the world to these buyers. Mostly, we see Indians with family or business interests abroad who are interesting in property on foreign shores.”
Investing in real estate in a foreign country also helps diversify one’s financial portfolio, and can ensure good capital growth and guaranteed regular rental income, if the investment is made in the right markets, Nair adds.
In Phase 1 of the Sobha Group’s new Hartland project in Dubai, for instance, 25% of buyers are Indian.
“There aren’t as many incentives for investing in real-estate in India as there are in the Emirates,” says PNC Menon, chairman of Sobha Group. “In Dubai, for instance, Indian investors get a tax break of 8% to 10%.”
GLOBE-TROTTING
Globally, the top seven hotspots for Indians looking to invest in real-estate outside India are currently Dubai, the UK, the US, Italy and Spain in Europe, and Thailand closer home, says JLL’s Nair.
From studio apartments priced under Rs 1 crore to luxury homes priced upwards of Rs 50 crore, Dubai has a wide range of investment options. Proximity to India, its cosmopolitan culture, stable economy and world-class infrastructure make it a top preference for Indian investors.
“Despite Brexit, or perhaps because of it, the UK – particularly London – is seen as a good bet. Property prices are softening and the economy is expected to witness a modest downturn, making it more attractive to investors in the near future,” Nair adds. It helps that Indian developers are building premium residential projects here — Indians make up about 20% of the buyers in the two Lodha projects in London, at Lincoln Square and Grosvenor Square.
In the US, Indians bought residential property worth $7.8 billion during the 12-month period ending March 2017, emerging as the fifth largest investors in real estate in the country. Backed by mortgage finance, these properties were largely acquired for use as primary residences or for use by a child studying in the US. America is preferred for its modestly priced properties rather than its high-end luxury homes.
“Indians wishing to buy a property in US can avail of the considerably lower interest rates of local banks there,” says Puri of Anarock.