Why are Indians Investing Overseas?
There is something about Indians and their growing fondness for international real estate investments. Emerging Indian footprints in residential and commercial neighbourhoods abroad have been a matter of immense interest and curiosity for the various stakeholders in International Property markets.
An exploratory Buying behaviour, investments returns, personal preferences are some of the key drivers pushing resident Indians to acquire residential property on foreign soil and with time this trend is moving on an upward curve.
There are several factors, which make an overseas property acquisition more attractive than investing in the domestic markets. The most common reason is sluggish realty market in recent time, the various changes implemented by the govt, and high overall pricing in the major metros, which offer little or no growth potential, poor infrastructure and poorer rental returns.
If one has to make an apple to apple comparison as an example, at the cost of Rs 45 lakhs, a property investor can get a fully-furnished condo unit in a premium location in Malaysia or Thailand, which not only offers an excellent lifestyle but also a chance to earn 10 per cent net rentals. As opposed to this, the same investor will perhaps be able to purchase a small, unfurnished 1 BHK apartment in the suburb of Dahisar on the outskirts of Mumbai, offering no lifestyle and practically no rental income.
Moreover, instead of buying a holiday home in the hills or near seashore, high net worth individuals are getting attracted at better options overseas. A premier property in an upcoming tourist destination, for example, may cost anybody close to the average cost of buying a 2-BHK apartment in Mumbai, Pune or Gurgaon. Whereas, the slowdown in many foreign economies, especially in the US and the UK, over the last few years has made real estate prices more affordable. The local second home also relies on the owner for maintenance and often is cumbersome and expensive to maintain.
This has opened an option for High Net Worth Individuals to buy property overseas for both investments as well as personal consumption.