From time immemorial, when it comes to investment the first asset to pop into the mind of Indians is real estate! Purchasing and owning properties is not just an investment here but a sentiment, a culture, and a sense of pride as well.
Even if provided with information on other tools & assets, a striking majority will prefer the investment in real estate. Tangibility and possession and the sense of ownership make this investment unique.
But the real estate market in India has not performed at par with expectations and has been outstripped by other assets like gold, stocks, and mutual funds.
As per an ET Money report, the average 10-year return on real estate investment has only been 10%.
Indian house prices grew 3.8% YoY in Sep 2022, following an increase of 3.8% YoY in the previous quarter. YoY growth data is updated quarterly, available from Mar 2011 to Sep 2022, with an average growth rate of 5.1%. House price data reached an all-time high of 30.6% in Mar 2011 and a record low of -11.4% in Sep 2020.
For better returns and diversification many have started the hunt for other better-yielding investments, but those with not much expertise in them are still looking for real-estate options.
Well, these numbing numbers might sound like a problem statement in them, so not going into the further details let’s delve into the solution.
And, as a solution, now the time is to check investment in overseas properties.
Higher yields, better growth prospects, and the availability of fractional options are what drive our fellow Indian investors to put their money to work overseas.
Other important factors include:
With the amendments in the Liberalized Remittance Scheme, especially in terms of enhancing the capital investment limit, now purchasing premium properties is easier. Now Indians can send up to $2, 50,000 abroad per financial year. It can be for holidays, treatments, gifts, education, or investment, but RBI says that most of the money sent abroad is used to purchase properties there.
As per the RBI data, in the financial year of 2021-22, Indians brought property worth $113 million abroad.
In terms of the RoI, overseas investment in properties in prime locations like Dubai is going to fetch much better returns. Premium properties in Dubai are now the favourite investment option. In the year 2021, the transactional volumes for residential units priced above 3.6 million went up by 41.1% in one year- for better returns. Khaleej Times reported that in 2022 luxury properties witnessed at least 15% growth.
Different assets and financial tools are acquired strategically to fix the flaws of the other, and to get a better return, in unison. From this perspective purchasing premium properties in Dubai is the best tool to diversify your investment portfolio across classes and geographies. With a currency hedge, such an investment in a mature market with lesser volatility is the best for your portfolio diversification.
Second Base at foreign shore
Ease of living, quality of life, better infrastructure, and a stable economy are what make Dubai more fascinating to live in. For this fascination, many of the elite class Indians are setting up their other base in Dubai, and other international locations.
Taxation and other laws
This is an important factor when deciding the destination for your investments. The best part about Dubai is that there is no income tax on individuals. Moreover, the country pays special attention to the security of its citizen. For this reason, many uber-rich Indians are looking to settle permanently there. Easy transactions and lenient taxation make Dubai the first choice for real estate investments. The UK, US, Italy, and other advanced nations have much easier norms and the process is smooth & seamless, comparatively.
The Bottom Line
The COVID-19 pandemic has upended the world, especially on the economic front. The conservative conventional approaches in the investments are not able to fetch satisfactory results now. For this reason, and for better diversification of the investment portfolio, one needs to get out of the traditional models and look for better yielding tools. And nothing can match the dividends offered by real-estate investment overseas now.
In case of confusion or queries, Dubai-Prime is always there to assist you in all the steps.