NRI Real Estate and Property Investment in India
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Global Indian Home Seekers turn towards Dubai, Malaysia
Tuesday, April 08, 2008

More and more Indians are investing in properties abroad, a trend that has led to huge incentives being thrown their way, by way of free plane tickets for a reccee, holiday packages or even a private jet on a penthouse! And the preferred markets for Indians are Dubai, Singapore, Malaysia, US and UK.

The latter two locations have been preferred by end users or NRIs who live and buy locally in these countries.

Dubai, Malaysia and Singapore have been locations which have generated interest over the last two to three years as investment destinations and prices in all three markets have soared, says Aditi Vijayakar, director transaction services, residential, India for Cushman & Wakefield.

Says Manoharan, India director for Tourism Malaysia, "Malaysia has a very high standard of living and the cost of living is one of the lowest in Asia.

"Besides, the country has a very well developed infrastructure, medical facilities, residence options, education opportunities and a vast array of recreation/entertainment options. From a 10-year multiple entry visa to buying a car free of tax, we offer many incentives to those who want to make Malaysia their second home."

Informs Sajwani, "Indians have bought residences as well as commercial properties in Dubai based on their budget and their individual requirements. During the last three years Dubai has emerged as the ultimate destination for international and local property investors.

"This boom was triggered by the freehold property scheme, unveiled in 2003, allowing foreigners to own property for life, with the right to sell, lease or rent it at their own will. Real estate projects of over $30 billion are currently under development. Indians can buy property on a lease of 90 years. No tax is applicable here."

But do the numbers add up? Just how easy - and sensible - is it to invest in a house abroad?

With a family of four working adults remitting US$200,000 (Rs 80 lakh) each per financial year, it's not very tough to invest in residential property overseas. There's also a simple, perfectly legal way of doubling the outflow within a short period - send the maximum permitted amount each on March 31 and April 1.

While Singapore and Dubai have large international business communities that travel and lease apartments, Malaysia offers relatively cheaper investment alternatives and an emerging market conditions.

Singapore and Dubai have witnessed large scale infrastructure growth, commercial, retail and residential development but it will be difficult to assess the future growth prospects in the coming year.

Other markets like Dubai have seen a speculative surge where investors have moved in and out of investment in short spans.

"Dubai developers have been aggressive in offering sale incentives which could be a way of discounting prices upfront. Incentives range from holiday packages, to cars and even planes. It would however be interesting to understand the success rate of such incentives or whether serious purchasers eventually request for a reduction of the sale value rather than free give-always," says Vijayakar.



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