Indians are Investing in Foreign Properties More These Days! Guess, what’s the driving force?

Though the real estate market in India is facing a slowdown, wealthy Indians are seem to be very active in making investments in foreign properties. There is a significant increase in the number of Indian home buyers looking for real estate properties in California. 

In today’s age, Indian buyers have more purchasing power than the past years and they are not willing to get off the sidelines because of the uncertainties in the domestic economic market. In fact, a significant number of High Net-worth Individuals (HNIs) show a high affinity towards buying homes and other real estate properties outside India. 

The year 2020 is going to be a more beneficial year for Indian buyers as the estimated median home price in California will increase by 2.5% to $607,900 in 2020 when compared to 4.1% annual gain in 2019, as per California Association of Realtors forecast. 

So, what factors are fuelling the increased interest of Indians in overseas real estate?

First: A considerable drop in the prices of real estate properties in California is attracting more Indian buyers. The effective discounts and currency and price movements in prime locations of California are benefitting Indian buyers more than ever.  

Second: The yields for both capital and rental are higher in various locations of California as compared to property investments in Indian market. Mature markets like California offer higher returns, and relatively shorter building period.

Third: Indian HNIs invest in overseas real estate market because it provides them a hedge against the domestic economy and market risk. This comes as an advantage for Indians in the times when the domestic real estate market doesn’t perform well. 

Fourth: Real estate investing in California properties through mutual funds, exchange-traded funds, direct equity, and immovable property lead to portfolio diversification and act as a barrier against negative domestic events. 

Fifth: Investors also benefit from the depreciation in the Indian rupee during the phase of selling or liquidating the investment. 

This is not all! There are other appealing factors as well.

Sixth: The rules and regulations for real estate in major global cities of the US including are more transparent than India. The regulation system, healthcare facilities, and educational institutions are highly evolved in the US and all of these features are synonymous with better quality of life for Indians. 

Seventh: There are many Indians who consider buying properties in global cities with the intent of settling in and starting a new life. Recently introduced emigration schemes (such as EB-5 visa) are also influencing the pattern of property investments made by Indians. A substantial number of HNIs are moving to international locations because their present and future generations are more likely opting to stay abroad than previous times. 

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Created on Jan 8th 2020 23:54. Viewed 358 times.

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