Photo Caption: Left to Right Vimal Anand, Director, GMN Events Pvt Ltd, Shishir Baijal, Chairman & Managing Director , Knight Frank India, Dr. Samantak Das , Chief Economist & National Director - Research, Knight Frank India
Indians’ spends on overseas homes swell manifolds: Knight Frank-IREX report
- Buying international homes cheaper today vis-à-vis 2016
- Residential property in 4 out of the 5 most-preferred international markets earned positive returns over 5 years
- Almost 1 out of 4 resident Indians prefer to spend more than USD 1 million for a house overseas
- 63% Indian buyers picked compact apartments of less than 1,500 sq ft – the most preferred property size
- Children’s education and use of property as a second home are the primary reasons why resident Indians buy a property in the UK.
- More than two-third resident Indians prefer apartments followed by villas for overseas homes
New Delhi, October 5, 2017: Emerging Indian footprints in residential neighbourhoods abroad have been a matter of immense interest and curiosity. Looking beyond Borders, the latest report jointly brought out by Knight Frank India and the International Real Estate Expo (IREX) takes a closer look at the buying behaviour, investments returns, preferences and key drivers pushing resident Indians to acquire residential property on foreign soil.
Key findings:
OVERVIEW
- Overall findings based on 10 countries: Australia, Sri Lanka, United Arab Emirates, Malaysia, Cyprus, Mauritius, Thailand, USA, Philippines and United Kingdom
- Detailed analysis of the 6 most-preferred markets: Australia, Sri Lanka (except return on investments), United Arab Emirates, Malaysia, Cyprus and United Kingdom
- The share of funds spent on buying homes aboard through the Liberated Remittances Scheme dwindled from 8% in FY 2006 to 1% in FY 2017. But the quantum of investments rose by almost 59-folds from USD 1.9 mn in 2005–06 to USD 111.9 mn in 2016–17
INVESTMENTS IN OVERSEAS PROPERTY 5 YEARS BACK
- Resident Indians buying overseas homes at the end of Q2 2012 and selling the property five years later gained from the investments in 4 out of the 5 most preferred international markets
- Resident Indian investing in homes in Cyprus lost money owing to the decline in property prices coupled with appreciation of the Indian Rupee making it the only international market where it did not gain on investments
- At 51.6% Australia witnessed the highest property appreciation followed by Malaysia (43.8%) between Q2 2012 and Q2 2017
- Residential property buyers in Dubai have benefitted the highest with an overall return of 49.3% followed by Australia at 38.7%
- Dubai offered dual returns as the Indian Rupee depreciated versus the local UAE currency and property prices in the Gulf destination appreciated between Q2 2012 and Q2 2017
- Despite the strengthening of the Indian Rupee against the currencies of Australia, Malaysia and the United Kingdom, the impact of appreciation of property prices outweighed the impact of currency appreciation.
INVESTMENT RATIONALE FOR AN INVESTOR INVESTING TODAY
- Strengthening of the Indian Rupee against several global currencies has made investments in overseas homes more affordable than a year ago.
- Resident Indian buying homes in United Kingdom, Cyprus, Malaysia and Dubai today (as of end of Q2, 2017) would find cheaper as compared to a year ago. This is despite property appreciation in residential markets across Cyprus, UK and Malaysia.
- Buying a house in Malaysia is the cheapest followed by Dubai.
- Acquiring a residential property in Australia would be 11% steeper now over (as of end of Q2, 2017) over the same period last year as property appreciation has outweighed the advantage of the strengthened Indian Rupee.
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