Why Are Indians Buying Luxury Homes In The West?

Indian billionaires are among the largest consumers of luxury homes in London. But, London is not the only place where high net worth Indians (HNIs) buy luxury homes. Wealthy Indians buy homes in New York, London, Singapore, Dubai, and Australia. According to the Candy Global Prime Sector port, India is 6th among nations in domestic and international real estate investments by the HNIs. Proximity and a favorable tax environment are among the major reasons why Indians invest in Singapore and Middle Eastern cities.

But, why are Indians buying luxury homes in the West?

Amenities and infrastructure: There is of course, the reason that the best western cities have elements that make them a place where one would love to live in, like good infrastructure, a clean environment, world-class institutions, parks, hospitals and libraries. The most expensive property in Mumbai and Delhi is almost as expensive as the real estate in large global cities. However, Mumbai or Delhi do not promise the same amenities many western cities do.

But, is that all there is to it?

Drop in prices, lower rates and business-friendly West: A major reason Indians are increasingly buying luxury homes in the US and other parts of the West is the decline in real estate prices after recession. Due to the drop, much of the real estate fell within the reach of Indians and also became a better investment. The interest rates offered by banks and financial institutions in London and New York are also lower than the rates offered by Indian lenders. Wealthy Indians, who buy homes in these cities, can take loans from local banks. The business atmosphere in the West is also friendlier to real estate investors.

Ceiling on investments raised and growing affluence: The upper ceiling on the amount Indians can invest in property abroad was recently raised from $75,000 to $2,00,000. Growing affluence is another reason. India is a country where the number of high net worth individuals is growing faster than in any other part of the world.

Developers are buying too: It is not merely the wealthy Indians who buy homes in the West. Indian builders are also purchasing expensive property abroad. The Group, a reputed Indian developer of residential projects, recently bought the Canadian High Commission in Grosvenor Square for 306 million pounds.

Some western cities like New York provide a more stable environment where Indians can invest in. Even though the price of apartments in India appreciate highly, the investment climate is not as stable. A major reason is inflation that erodes the value of currency. But, cities like New York are also recovering faster from the global recession than Europe and many other parts of the world. There are many HNIs who merely want to own a home in New York or London, as growing sales in these cities indicate.

Needless to mention, there are many other reasons too. Some wealthy Indians buy luxury homes in the West because they would like to spend some time there every year, or because they have children who study abroad. For instance, rich Indians buy homes for their children who study in London. Some buy luxury homes in the West because they travel frequently for business-related reasons. Some do this because they work in the West and prefer to own a home in the city where they work in, though they are still Indian citizens.

With growing affluence, increasingly globalized nature of the world, and weakening foreign investment restrictions, wealthy Indians who buy luxury homes are rapidly becoming a group that can influence the real estate in major western cities.