The recent global trend of India buying up real estate is a component of HNI’s and UHNI’s plan B options.
Indians are now the largest group of property purchasers in Dubai, according to the recently released Betterhomes Dubai Real Estate Market Report for FY23. This is an intriguing trend.
UHNIs from all over the world who want to participate in this booming real estate market share this interest in addition to expats already employed in Dubai.
There are many reasons for this increase in interest, including the appreciation of capital, the high rental yields relative to India, the availability of 100% freehold properties, tax-free investments, world-class infrastructure, currency appreciation, and the golden visa. Furthermore, purchasing real estate in Dubai is more about the satisfaction of becoming a property owner in a major world city like Dubai than investing.
The recent global trend of Indians buying up real estate is a component of NHI’s and UHI’s plan B options. The new class of wealthy Indian families aspires to live in a world devoid of national borders that are open, globalized, and interconnected.
Due to their culture of working from anywhere, these UHNI’s are eager to buy pricey properties outside of India in places like Dubai and London. This will enable them to pursue their professional and personal objectives and spend time abroad.
Furthermore, as part of their generational planning, these families hope to invest their way into alternative residency or citizenship. Giving their children the best opportunities for a college education, improved career prospects and quality of life, retirement planning, new business opportunities, and visa-free travel to many countries due to their stronger passports is the goal in these situations.
Global diversification
Along with the benefits of geographic and currency diversification, international diversification lowers the portfolio’s overall risk. In addition to funds that invest across multiple geographies and provide access to real estate domains such as commercial, residential, land parcels, warehouses, etc., investors should also consider options such as REITs and InvITs when making real estate investments.
After selecting the portion of their portfolio to be allocated to international real estate, investors should consider the demand and supply dynamics of the area, the likelihood of profits, and the trajectory of interest rates, which will eventually support real estate due to their gradual decline. Comprehending the impact cost, exit cost, and tax laws is imperative, as they play a crucial role in the rental or eventual sale of the properties.
Before investing in foreign real estate, investors should inquire if their wealth management team has local partnerships in different markets. In the future, collaborating with a local partner can benefit investors in several ways, including advisory, execution, monitoring, and resale.
This is because after a property is purchased, it requires a lot of supervision, and when it comes time to sell, factors like impact costs, exit costs, and tax laws become important.
If it is a commercial property, local teams would also have a fair idea of how to rent out the business space. To put it briefly, the local partner will undertake all of the legal and financial due diligence needed to buy, maintain, and resell the property.
In conclusion, purchasing property overseas is a wise choice, particularly for those who want a backup plan– Plan B— that they can always turn into Plan A. The most popular nations among HNIs and UHNIs considering alternate residency or citizenship are the USA, Portugal, Canada, and the UK.
Hence, investors looking to acquire international properties should go through a wealth advisor who, with their astute advice and expertise in the local markets, can help simplify and fasten the investment process, which will, in turn, help investors achieve their global mobility goals.
