NEW DELHI: India’s high net worth individuals are increasingly investing in luxury assets overseas, according to top global luxury real estate experts.
For Sotheby’s International Realty, the arm of auction house Sotheby’s that offers luxury real estate for sale worldwide, Indians constituted the third largest group of international buyers in the US last year, behind China and Canada.
Sotheby’s International Realty will launch an India desk, especially for Indian buyers in New York this year. The uptick in the number of Indian real estate buyers is being seen in other markets in Europe too.
Indians invested $7.8 billion in prime residential real estate in the US last year, up from under $6 billion in 2016, while 22% of the buyers of central London properties last year were Indians.
Industry leaders from the luxury real estate sector discussed such investment trends at the Global Luxury Realty Conclave 2018, which was organised by India Sotheby’s International Realty in partnership with the CII. ETwas the media partner for the event.
“The wealth being created in India is significant,” said Philip White, president and CEO, Sotheby’s International Realty Affiliates, while Ian Plumley , senior vice-president MENA and India at UK-based Berkeley Group said his company is focused on promoting London as an investment destination through the network being built here.
Tax experts said the trend is not restricted to just NRIs but is also visible among Indians based in India.
“Getting a residential permit does not seem to be the criteria for investing in overseas assets any more. Earlier, we saw NRI, PIOs investing in global assets, but that is not the case any more,” said Praveen Bhambani, leader, private and entrepreneurial business and partner, mergers and acquisition (tax) at PwC India. “Tax implications are not deterring buyers.”
Other discussions revolved around the changes in tax policies and regulations like RERA, investing in most sought after destinations and trends in global mobility via citizenship and investments.
Rajiv Kumar, vice-chairman of Niti Aayog, said India’s real estate sector is beginning to rise again. “We are focused on affordable housing in the government, but if luxury leads the march in real estate, it will be amazing because it is where large values get created. The sector has taken a knock in the country but it is beginning to rise again… This sector in India was characterised by black money and opaque transactions.
That is beginning to change because of demonetisation and GST and steps like RERA introduction,” he said. “Real estate will surely and steadily begin to take on higher valuations, demand and supply as we go forward.”
The event also marked the launch of the report titled ‘Luxury Real Estate Overview 2018’, launched by India Sotheby’s International Realty in partnership with PwC and RICS.
As per the report, the share of investment in residential market decreased from 50% in 2010 to 28% in 2016 and just 4% in 2017. In the same period, office investment increased from 29% to 66%. This indicated a change in preference of investors from development (opportunistic) to completed (core) assets and from residential to office.
