Malaysian, Dubai properties give best return to Indians investing abroad: Report

With the Indian property market looking beyond the country’s borders, Indians invested USD112 million last fiscal to buy immovable properties abroad, up nearly 60 times from 2005-06, said a report.

Kuala Lumpur
Photo courtesy: Retail News Asia

It said property overseas became affordable in 2016-17 due to strengthening of the rupee compared to the previous fiscal, when buyers had invested USD88.4 million.

"The quantum of money sent through  Liberated Remittances Scheme (LRS) for acquisition of property has increased almost 59 times, from USD1.9 million in 2005-06 to USD111.9 million in 2016-17," said the report by Knight Frank India and the International Real Estate Expo (IREX) released today.

However, the share of funds spent on buying homes abroad through the LRS fell from 8 per cent in 2005-06 to 1 per cent in 2016-17, it added.

The report 'Looking beyond Borders' aimed at studying buying behaviour, investment returns, preferences and key drivers pushing resident Indians to acquire residential property on foreign soil.

"Strengthening of the Indian rupee against several global currencies has made investments in overseas homes more affordable than a year ago," it said.

Buying a house in Malaysia is the cheapest followed by Dubai, it added.

Resident Indian buying homes in United Kingdom, Cyprus, Malaysia and Dubai would find cheaper as compared to a year ago but acquiring a residential property in Australia would be 11 per cent costlier.

The findings in this report are based on 10 countries: Australia, Sri Lanka, United Arab Emirates, Malaysia, Cyprus, Mauritius, Thailand, USA, Philippines and United Kingdom , PTI reported.

Approximately 77 per cent of the Indian buyers prefer a property that is less than USD1 million.

"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," the consultant said.

Residential property buyers in Dubai have benefited the highest with an overall return of 49.3 per cent followed by Australia at 38.7 per cent. UK and Malaysia gave return of 20 per cent and 15 per cent respectively.

However, the returns were negative from Cyprus due to decline in property prices and rupee appreciation. As per the report, most Indians buy homes abroad for investment purposes followed by the aspiration of having a second home.

Sixty-three per cent of the resident Indian buyers preferred compact apartments of less than 1,500 sq ft.

About one-fifth of the resident Indians showed a preference for a villa since countries such as Cyprus and Sri Lanka are perceived as second home options and holiday destinations.

Author
Tushaar Kuthiala
Tushaar Kuthiala – Senior Writer

Tushaar has five years experience as a journalist in founding two start-up newspapers. He worked as a special correspondent based in New Delhi with Daily World, an international media organisation. He enjoys reading and writing fiction in his spare time.

 

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