More Indians are investing in Dubai’s real estate rather than buying properties within India. As a result, realty in India continues to be sluggish.
Dubai Land Department's data shows that the investments made by Indian nationals has touched Rs 42,000 crore in the last 18 months, which is an increase by 40% in three years. In 2014, the investments made by Indian was at around Rs 30,000 crore.
On the subject, Shobhit Agarwal, Managing Director (Capital Markets) JLL India said, “Dubai has always been an attractive real estate investment destination for Indians, but the intensity of interest has increased considerably over the past few years. Today, Indians are the largest foreign investors in Dubai real estate by a comfortable margin.”
There are various reasons for such a high interest. These being attractive returns, ease of investing, high transparency, lower budget requirement and investment churn.
If an Indian invests in Dubai, there’s 8-10% returns that too tax free. A recent Knight Frank report had mentioned that from 2012 to 2017, Indian residential property buyers have seen an overall return of 49.3% in Dubai, the highest anywhere in the world.
“As per the current RBI norms, an Indian can remit as much as USD 2,50,000 per annum to Dubai or any other country which effectively means that within just two years, an individual (just one year for a couple which clubs their remittances) USD 5,00,000 can be invested in Dubai - enough to buy a quality property there,” explained Agarwal.
Indian property business is still undergoing transformation to become transparent, but Dubai’s market has been highly transparent. Additionally, unlike the need for high capital to buy property in at a good location in an Indian metropolis, in Dubai, the budget requirement is far less to around USD 25,000 or around Rs 16-17 lakh.
“In the last few years, the Indian stock markets have delivered high returns to investors. With every rise the risk of fall increases, thereby investors book profits from equities into other lucrative asset classes one of which is real estate, be it Indian or overseas,” added Agarwal.
