Looking for a second house? Try Cyprus, Sri Lanka or even Melbourne
For a price of a 3BHK in Worli, you can buy beachfront homes in exotic countries and many Indians are opting for these.real estate Updated: Oct 16, 2017 17:58 IST
Most Indians in the market for a second home tend to look within India. After all, homes abroad would be frightfully expensive for someone earning in rupees, wouldn’t they? And what about the return on investment?
The answers to both are brighter than buyers imagine. You can now get a plush villa in Sri Lanka, a bungalow in Dubai, an apartment in the US and the UK for the money you get a flat at Napean Sea Road or less.
Indians are looking at buying small homes abroad at price similar to those in Mumbai and Delhi. It’s cheaper this financial year, says a report released by Knight Frank India and the International Real Estate Expo (IREX) last week. The report indicates that Indians prefer houses of less than 1,500 square feet.
When Aman Kumar (name changed on request), 30, a software engineer from Santa Cruz, went to Cyprus for a vacation last year, little did he know that he would end up sealing a deal for a house there. Kumar says he was impressed by the culture of the country and quality of construction. “The island country has cheap homes and for around Rs 3.5 crore, I got a villa close to a beach,” he says. The added benefits, he says, are the ease of getting citizenship and right to live, work and study in all 28 European Union countries.
Cyprus is among six markets resident Indians invest in the most, according to the Knight Frank India and the IREX report. Australia, Malaysia, Sri Lanka, the UAE, the US and the UK are among the markets most-preferred by resident Indians.
Homes beyond borders
Let’s consider a budget of Rs 5 crore – an amount that puts buyers squarely in the mid-segment in India. What kind of homes does that amount fetch in Australia, the US, the UK, Sri Lanka, the UAE and Cyprus?
Samantak Das, chief economist and national director of research at Knight Frank India says that 65% of Indians who buy homes abroad prefer a compact house rather than a sprawling mansion. “You get a comfortable apartment in the periphery of London for Rs 5 crore,” says Das. The house will have high-tech AV systems, simple yet modern décor and will give you a high standard of living. The location will also allow access to London’s public amenities, better roads and more parks than Mumbai or Delhi. A one bedroom flat in plush west London will cost you around the same or a little more. “Most Indians buy homes for their children in the UK, they stay here when they come to study,” says Das.
The rest of the UK is also not as expensive as you think. Vimal Anand, director at IREX, says that for a little more than Rs 5 crore, you get a villa within an hour’s drive from the city. The cost of living, however, is much more than in Mumbai.
The 5-crore budget also stretches to the USA where Indian’s have bought four-bedroom furnished villas in Florida and Chicago, three-bedroom flats in Long Island and 1,500 square-feet flats in New York City, says Vimal Anand, director at IREX. “The best part about investing abroad is that you get what you pay for. There are no vague concepts such as super build-up area and carpet area; only actual area,” he says.
In most parts of Dubai, real estate rates match those in Mumbai, says Shubika Bilkha, business head at The Real Estate Management Institute. “You get two-bedroom homes in well-developed areas such as Dubai Marina, Business Bay and Palm Jumeirah for that amount or a little more,” she says. The Knight Frank and IREX report has rated lifestyle 4.7 on 5 based on the survey. “You get a 1,200 square-feet flat in downtown Dubai with community amenities such as gym, pool and spa,” says Anand.
In Sri Lanka, the rupee goes even further. You can get a five-bedroom beach-front house in Galle city in Sri Lanka for less than Rs 3.5 crore, an unthinkable price for a similar property in India, says Das.
Resident Indians are investing in second homes abroad primality because of the ease of operations, a lifestyle upgrade, better infrastructure and amenities. There are, however, some things you need to keep in mind before you buy your home away from home.
Manila (name changed on request), 35, a businesswoman, bought a house near London city two years ago for her son to stay while he was pursuing a Masters degree. “While the real-estate prices are very competitive in the UK, living there is pretty expensive,” she says. “The universities are world-class and culture is cosmopolitan. But when you live here longer than a few months, you can begin to look like the urban poor; you are paying a lot to even eat a sandwich and rush-hour commutes will tire you.”
In Australia, where Melbourne is among the world’s most liveable cities, 37% resident Indians are willing to pay more than Rs 4 crore to buy property, says the report. “The properties are delivered on-time and buying a house is easy,” says Das. However, you may feel lonely because the population is small, the rest of the country is largely empty and cost of living is quite high.
In case of Cyprus, investment can be a little risky as it has not given good return recently. “Cyprus was the only country that has given negative returns on investment made five years ago,” says the report. “However, it is now favourable to invest here due to low property prices.”