After Dubai, Singapore and London, the US seems to be the next destination for Indian residential property buyers, whether they are naturalised American citizens or resident Indians with business interests there.
A report by the US National Association of Relators (NAR) last month said Indians spent $5.8 billion, buying residential properties for the year ended March 31, 2014. This is a 6% jump over the previous fiscal.
Anuj Puri, chairman and country head of real estate consultancy firm JLL India, believes this is an "interesting finding".
Why this sudden love for US property?
India's long-standing love with America and all things American is one factor, says Puri. J C Sharma, MD, Sobha Developers, says overseas properties are attractive for those Indians who see their future in these places. "Indians are buying it (residential properties) in Dubai, Singapore, London and the US as they find their future in these places," he said. According to him, Indian-origin developers are also working in these countries to cash in on the growing demand.
Is there any policy helping buyers?
What has helped resident Indians is the recent relaxation of Liberalised Remittances Scheme (LRS) by the RBI to increase the annual investment ceiling for individuals to buy overseas property from $75,000 to $1,25,000. "This investment limit is a small but important window. A married couple can now buy a small property in a US suburb if they have the inclination to do so. Previously, real estate, as an option, was entirely out of the LRS scheme and the limit purview," said Puri.
How do resident Indians buy homes in US?
The current annual limit under LRS, which is equivalent to Rs 75 lakh, makes it possible for an Indian resident to buy a house worth $460,000 in the US in three to four installments with a gap of a year between each installment. Since there are still quite a few apartments held by institutional investors who had bought them during the mortgage crisis, it is easy for foreign buyers to snap a deal with them than with individual US house owners.
