Things to know before investing in property abroad
05 Dec 2015
There is something about Indians and real estate investment. The growth of the Indian real estate sector has been testimony for this unexplained ardour. However, with sluggish realty markets in recent times and high overall pricing, many HNI Indians are investing in real estate overseas.
The growing interest in overseas real estate investment by Indians can be gauged from the fact that the total remittance for property purchase overseas in 2014-15 has been over $45 million.
Exploring real estate options overseas: A good idea?
One of the main reasons why overseas real estate investments are on the rise is the sluggish domestic market. High net worth individuals are buying property overseas for both investment purposes and personal consumption. Instead of buying a holiday home in the hills or in Goa, celebrities or high net worth individuals are looking at better options overseas.
Low and affordable prices: A premier property in an upcoming tourist destination for example may cost you close to the average cost of buying a 3-BHK apartment in Gurgaon. The slowdown in many foreign economies, especially in the US and the UK, over the last few years has also made real estate prices more affordable.
Higher upside in the coming years: Unlike Indian real estate market where prices have escalated to such high levels that a plateau of sorts has developed, prices in many overseas markets are likely to revive soon. The upside for real estate investments in the medium- to long-term is a big possibility for those countries that are making efforts to come out of the global economic slowdown. Countries like Thailand and Sri Lanka that are placing thrust on tourism are also likely to witness an appreciation in property prices in the medium term.
Transparency: Many foreign real estate markets work and operate in a much more transparent manner as compared to the Indian real estate sector. There are no delays or other red tape due to bureaucratic processes or paperwork.
Residency benefits: Some countries offer residency and citizenship benefits if you own a property in that country. So, if you plan to migrate at some point in the future to that country, investing in real estate can be a good way to attain an easy access to residency.
Overseas Hotspots of Indians
Some markets have a higher attraction for buyers than others.Top overseas markets are:
Dubai: Indians have been the highest contributors to Dubai’s real estate market. Dubai’s close proximity to India, its geopolitical position as the gateway to Europe and US, and fast appreciating rates make Dubai a prime overseas real estate investment hub.
Singapore: Singapore is another hotspot in Asia where Indians are investing in real estate. The large Indian population with attractive ambience is attractive.
London: London has always been a strong real estate market, but the current economic slowdown now means you can get properties at lower valuation making it an attractive market.