Have money to invest? UK, US can give better opportunities than Delhi, Mumbai real estate

By: | Published: February 12, 2019 5:53 PM

Property prices in places like New York, London or central Singapore are more or less on par with the prices of ultra-luxury properties in, say, central Delhi or South Mumbai.

real estate investment, real estate India, real estate USA, real estate UK, investing in real estate india, delhi, mumbai, dubai property, investing in foreign marketsInvesting in foreign markets also creates a hedge against the depreciating Indian currency.

Planning to buy or invest in a piece of property in India, but have kept your plans on hold because of high property prices or the adverse market conditions? Relax! You don’t need to wait further as there are better opportunities abroad currently– even in as developed a market as the US or the UK.

True, buying property abroad is not easy and requires lots of deliberations, apart from meeting some conditions. However, people with deep pockets – especially those who are planning to settle abroad sooner or later, or already have business interests or family in a certain country – can acquire a residential unit either as a second home or investment.

Industry experts say that non-resident Indians and resident Indians have always had a penchant for making real estate investments. While real estate in India has demonstrated good capital appreciation over the past two decades, however, the last 5 years have witnessed minimal capital appreciation. Also, investors have to bear the brunt of additional GST burden, and NRIs have had to face the issue of a depreciating rupee. These two aspects together have dampened the spirits of investors in real estate, especially in India.

“Not to mention, investors are also facing issues with delayed delivery across markets with some developers. This has also created a trust deficit. On the other hand, markets such as the US and the UK, for instance, have been relatively stable. The UK has seen some correction in pricing of real estate due to the on-going Brexit discussions and uncertainty in regards to that. Hence, there are good realty deals available in the UK,” says Nitesh Punjabi, Associate Director-Capital Markets and Investment Services at Colliers International India.

Investing in foreign markets also creates a hedge against the depreciating Indian currency. In addition to factors of stability of capital values, foreign markets also offer substantially lower borrowing costs to the purchaser. Unlike India, the borrowing costs are more or less equivalent to rental yields in some of the foreign markets, which makes the investment decision look attractive.

“There are also certain factors such as the pride value of owning a property in an overseas market. In addition to this, some investors also look at the possibility of getting a long-term visa/residency permit post making such investments. Overall, investing in foreign markets has multiple motives such as stability of investment, financial management, and personal reasons,” informs Punjabi.

Whatever be the reason to buy a piece of property abroad, at the end of the day, purchasing power obviously remains the primary consideration.

Surprisingly, “property prices in places like New York, London or central Singapore are more or less on par with the prices of ultra-luxury properties in, say, central Delhi or South Mumbai. In other words, properties with price-tags between Rs 15 and Rs 25 crore. Another trend we have been witnessing is that some recent project launches in Dubai offer property options which are comparable to those of upper-mid-segment options in Bangalore, Pune, and some suburbs of Mumbai and Navi Mumbai with price tags in the region of Rs 2-3 crore,” says Prashant Thakur, Head–Research, ANAROCK Property Consultants.

A research report by ANAROCK Property Consultants says that depending on their purchasing power, plans and objectives in the target country, one may also opt for affordable housing in the outskirts of main cities or compact office-cum-residences closer to the city centres. However, this requires a fairly sound understanding of the market as the lack of such knowledge may result in a disastrous purchase decision.

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