Indians Leading the Way in Dubai Real Estate Purchases
Indians have emerged as the largest group of property purchasers in Dubai, according to the recently released Betterhomes Dubai Real Estate Market Report for FY23. This trend reflects a growing interest among UHNIs and HNIs globally, who are eager to participate in this thriving market.
Drivers of the Trend
Several factors contribute to this surge in interest, including:
- Capital Appreciation
- High Rental Yields compared to India
- Availability of 100% Freehold Properties
- Tax-Free Investments
- World-Class Infrastructure
- Currency Appreciation
- Golden Visa
Moreover, purchasing real estate in Dubai is not just an investment; it is about the prestige of owning property in a major global city.
Global Diversification Strategy
The recent global trend of Indians buying overseas real estate reflects a contingency plan—Plan B—for HNIs and UHNIs. This new class of wealthy Indian families aims to live in a borderless world, open, and interconnected.
These UHNIs, driven by a culture of remote working, are keen on purchasing premium properties outside India in locations such as Dubai and London. This allows them to pursue their professional and personal goals while spending time abroad.
Investment Goals
Additionally, these families aim to secure alternative residency or citizenship through such investments, providing their children with:
- Best Opportunities for Higher Education
- Improved Career Prospects
- Quality of Life
- Retirement Planning
- New Business Opportunities
- Visa-Free Travel
Benefits of International Diversification
International diversification offers the advantages of geographic and currency diversification, reducing the overall risk of the portfolio. Investors should consider various options such as REITs and InvITs, which provide access to different real estate domains like commercial, residential, land parcels, and warehouses.
Key Considerations
Before investing in international real estate, investors should:
- Understand the Demand and Supply Dynamics of the area.
- Assess the Likelihood of Profits.
- Consider the Trajectory of Interest Rates.
- Comprehend Impact Cost, Exit Cost, and Tax Laws.
Investors should also check if their wealth management team has local partnerships in different markets, as these partnerships can offer significant benefits, including advisory, execution, monitoring, and resale services.
Role of Local Partners
Local partners play a crucial role in the lifecycle of the property, from purchase to resale. They handle all legal and financial due diligence necessary for buying, maintaining, and reselling the property. For commercial properties, local partners can provide insights into renting out business spaces.
Conclusion
Purchasing property overseas is a strategic choice, especially for those seeking a backup plan—Plan B—that can be turned into Plan A. The most popular countries among HNIs and UHNIs considering alternate residency or citizenship are the USA, Portugal, Canada, and the UK. Investors looking to acquire international properties should consult wealth advisors with expertise in local markets to streamline and accelerate the investment process, achieving their global mobility goals.