Neighbouring Malaysia currently seems to be doing a better job attracting Indian property buyers and investors than Thailand.
Emerging Indian footprints in residential neighbourhoods abroad have been a matter of immense interest and curiosity.
Looking beyond Borders, a report from Knight Frank India and the International Real Estate Expo (IREX) took a closer look at the buying behaviour, investments returns, preferences and key drivers pushing resident Indians to acquire residential property on foreign soil.
Overall findings based on were based on data from 10 countries: Australia, Sri Lanka, United Arab Emirates, Malaysia, Cyprus, Mauritius, Thailand, USA, Philippines and United Kingdom, and included detailed analysis of the six most-preferred markets: Australia, Sri Lanka (except return on investments), United Arab Emirates, Malaysia, Cyprus and United Kingdom
At 51.6 percent, Australia witnessed the highest property appreciation followed by Malaysia (43.8%) between Q2 2012 and Q2 2017.
Indian residential property buyers in Dubai benefitted the highest with an overall return of 49.3 percent, followed by Australia at 38.7 percent.
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 INDIAN 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 Indians 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 is 11 percent more costly now (as of end of Q2, 2017) compared with the same period last year, as property appreciation has outweighed the advantage of the strengthened Indian Rupee.
HOME PREFERENCES FOR INDIAN BUYERS
The report noted that queries from resident Indian buyers increased marginally from 11 percent in 2015 to 15 percent in 2016 and held steady around that mark this year
Similarly sales volumes rose from 6 percent in 2015 to 8 percent in the subsequent year and sustained at 7 percent this year
Most resident Indian buyers intend to purchase property abroad for investment purposes followed by the aspiration of having a second home.
Some 63 percent of resident Indian buyers preferred compact apartments of less than 1,500 sq.ft, while about one-fifth of 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
Approximately 77 percent of Indian buyers prefer a property that is less than US$ 1 million (THB 3.34 million).
Almost one in 4 resident Indians prefer to spend more than US$ 1 million for a house overseas.
Dr. Samantak Das, Chief Economist and National Director – Research, Knight Frank India, said: “Our perceptions on buying international property have been largely confined to high net worth individuals buying luxury housing at picturesque foreign locations.”
“At the onset this report looks beyond that stereotype and throws light on mainstream residential property purchased by resident Indians from other income groups. It further delves into buyers’ preferences over size of homes, budgets and most importantly the key drivers pushing resident Indians to acquire homes abroad.”