Indians Spent $112 Million to Buy Properties Abroad: Report
Investment made by resident Indians in real estate abroad went up almost 60 per cent in the last financial year than that in 2005-06, according to a recent report. Indians spent $112 million last fiscal to buy immovable properties abroad, as compared to the corresponding figure of $1.9 million in 2005-06.
“The quantum of money sent through LRS (Liberated Remittances Scheme) for acquisition of property has increased almost 59 times, from USD 1.9 million in 2005-06 to USD 111.9 million in 2016-17,” the report by Knight Frank India and the International Real Estate Expo (IREX) released on Oct. 5 said, citing the strengthening of rupee during the period as the reason. In comparison, the amount invested by people in the previous fiscal was $88.4 million.
The report, titled Looking beyond Borders, studied the factors prompting resident Indian buyers to buy property in overseas markets, the preferred property size, and the budget for property purchase. The survey results showed that a majority of resident Indians have a budget up to $1.5 million, though approximately 77 per cent of them prefer a property that costs less than $1 million, and 63 per cent people look for apartments less than 1,500 sq ft in size. Most dominant buyers are businessmen or industrialists.
The report took into account 10 countries: Australia, Sri Lanka, United Arab Emirates, Malaysia, Cyprus, Mauritius, Thailand, USA, Philippines and United Kingdom. Malaysia offered property at the cheapest price, followed by Dubai, it revealed. Homes in United Kingdom, Cyprus, Malaysia and Dubai are cheaper now as compared to a year ago, even though property prices have appreciated in Cyprus, the UK and Malaysia in this period. Buying a house in Australia, however, would be 11 per cent costlier than last year since the quantum of increase in property prices has surpassed the strengthening of the Indian Rupee.
“Overall, the survey suggests that majority of Indians buy a property abroad for investment purposes, which is closely followed by the aspiration of having a second home,” the report stated. Also, the rental yields abroad are much higher than in India, being as high as 6-7 per cent per annum in countries like the UAE, particularly in Dubai, as compared to the rental yields of 1.5-2.5 per cent per annum in India.