- Where Is The Wealthy Indian Buying Home
*London, Dubai and Singapore are the popular destinations for wealthy
Indians when it comes to buying homes abroad*
*A majority of real estate buyers on foreign shores comprise people who are
looking for a second home or a place to holiday in, and for those whose
children are studying abroad.*
*Back in the 1990s, owning a house or even an apartment in south Mumbai
meant serious wealth. For the new rich, or ultra high networth individuals
(HNIs) of today, to whom no place is too far to go and no price too high to
pay, that address is pretty much passe.*
*"Some of the fanciest districts in the world, such as Kensington,
Belgravia or Holland Park in London or prestigious locations such as the
Burj in Dubai and Nassim Road in Singapore are among the most popular
global locations for Indian ultra HNIs to own luxury residential
properties," in a recent report.*
*Indians were among the top five international real estate buyers in the US
in the year ended March, according to the US National Association of
Realtors. Indians, along with buyers from Canada, China, Mexico and the UK,
accounted for some 53% of international property buyers in the US in the
year ended March, according to a survey by the association.*
*The global financial crisis and recession that followed the collapse of
Wall Street investment bank Lehman Brothers Holdings Inc. in September 2008
opened up the foreign real estate market to Indian buyers. As European and
American home owners struggled to repay their mortgages, and property
prices plunged, Indians who had the means pounced on the opportunity.*
*Money is no object. According to the Forbes Billionaires List, the number
of Indian billionaires increased to 55 in March from 48 last year. The
combined wealth of Indian billionaires as of March 2013 was $189 billion,
which, to put it in perspective, is roughly one-and-a-half times the size
of Bangladesh's economy or three times the size of the Sri Lankan economy
in 2012, according to International Monetary Fund (IMF) figures.*
*Top of the Pyramid report, defined an ultra HNI household as one having a
minimum average net worth of Rs.25 crore, essentially accumulated over the
past 10 years. The latest report pegs the number of such households in the
country at more than 100,900, which is poised to more than triple to over
329,000 by 2017-18.*
*The 2013 report says that driven by increasing globalization, comparable
valuations overseas and investment considerations, more and more ultra HNIs
are purchasing luxury properties abroad in places such as Singapore, London
and Dubai.*
*photo*
*Report 2013 says that despite recent economic concerns, the number of HNIs
in India is expected to more than double over the next 10 years, rising
137% in Mumbai alone.*
*The report says that prime residential and commercial property in
relatively risk-free locations has always attracted investors in times of
economic and political turbulence.*
*"There is something comforting about tangible assets that, barring
natural disaster, will retain their inherent value over time, even if
prices dip in the short term," says the report.*
*"Wealthy investors are also starting to buy into recovery, breathing new
life into previously moribund markets such as Dubai and Dublin."*
*A majority of real estate buyers on foreign shores comprise people who are
looking for a second home or a place to holiday in, and for those whose
children are studying abroad.**"Education- and business-related interests
are the major drivers behind such acquisitions," *
*Australia, the Middle East--including Dubai, Muscat and Abu Dhabi--and the
UK (especially London) and the US are the prime locations, *
*Then there are people who are working outside India and for whom buying a
home in the country they are employed in makes more sense than buying one
in India.**"Consumer knowledge has grown tremendously and the Indians
buying abroad are doing so with more information than ever," *
*"Understanding of the markets has changed," report says ."More and more
Indians are buying property outside the country today compared with five
years ago."*
*To be sure, the ardour to buy property overseas has been culled by an
August move by the Reserve Bank of India (RBI) to restrict investments
outside India in an attempt to stop outflows of dollars and stem the
rupee's decline against the dollar. The central bank has subsequently
clarified that the measures are temporary. **Report admits that buyers have
become more cautious after RBI's move.*
*"Due to this change, investing in properties abroad is not a viable
proposition anymore," says a consultant working with a global property
consultancy who asked not to be identified. "Moreover, for the builders
abroad as well as the global property consultant, marketing global
properties in India is not attractive any more."**"But it is too early to
say how this is going to impact the buying behavior of people," he says.*
*There are reasons why buying property overseas has become attractive to
Indian buyers--the growing population of cities such as New Delhi and Mumbai
and rising prices of real estate at home.*
*According to International Residential Index, residential real estate
prices in Mumbai are now on par with those in cities such as Dubai, Los
Angeles, Miami, Rome and Tokyo.**The choice of location is the predominant
factor, according to the TOP report. "All other things being equal," the
study says, "factors that come into play in the purchase decision include,
among others: the extra lifestyle benefits (such as a clean environment,
better managed public infrastructure, entertainment facilities, health and
sanitation) that accrue in cities such as London and New York; and the safe
haven status that some of these cities offer (because they have been able
to better withstand global financial and economic turmoil)."*
*"Today's Indian consumer buying properties abroad is backing up his/her
investment with solid reasoning," says report. "For tax-free investments
people are looking at Dubai, Singapore tops for its proximity to India plus
its booming economy. For returns on rental investment the
current favorite is London."*
*In reality, however, tax forms only part of the picture for the rich when
it comes to buying property, according to the report. "What they really
value...is the lifestyle that comes with an open, cosmopolitan environment
and both personal and property security."*
*"The other important factor when choosing a second-home location was its
potential to provide a long-term safe haven for capital," says the report.*
*According to report, familiarity with markets is the biggest "make or
break" factor for all Indian consumers. "Despite the many attractive
options available widely, Indians still gravitate towards tried-and-tested
markets mostly."*
*The size and the scale of property purchases differ according to the need
and resources of the individuals as do the prices.*
*"London and Singapore are the most popular and also some of the most
expensive markets. Usually, a good starting price for a decent property in
these places is around $1 million. Dubai and Malaysia present opportunities
to grab early-stage investments (i.e. bargains) and a good price there
would be around $300,000," says report.*
*Understanding of the markets is changing, report says/*
*"For homes that would cost around £2-3 million in India, people are now
willing to shell out upwards of £10 million in London," he says.*
*Some of the properties in central London, which is one of the most popular
destinations, would cost anywhere between £3 million and £15 million.*
*Source :Economic Times*
