Indian homebuyers may seem quite reluctant to buys properties here in India, but research shows that they are buying a lot of properties overseas. In the last one year, there has been a phenomenal rise of Indians in the high-profile realty market of London.
Research shared by property consultancy Cluttons' partner and head of research Faisal Durrani shows that between August 2016 and July 2017, Indian were involved in 22% of all real estate transactions in prime central London. “It has been noted recently that there has been an upturn in Indian buyers, making up about a fifth at nearly 4 billion pounds out of a total 18 billion pounds,” said Durrani.
This trend is also supported by real estate services firm Cushman & Wakefield's partner (residential ¬ London markets) Mike Bickerton. “Indian UK property investments accounted for only 5% of sales in central London five years ago in 2012. By 2017, that figure had jumped to 22%,” he said. Far East buyers accounted for the maximum share in Central London property transactions, at 36%.
The last peak in this market was seen 10 years ago in Q3 (July-September) of 2007. “If somebody purchased then in rupees, today they would find that their property is worth 20% more than what they paid for it 10 years ago (due to the Indian currency's movement). So that means there's a strong incentive to sell,” Durrani added.
Dollar-denominated deals offer an incentive too for adding the London property portfolio. “For Indian buyers with holdings in US dollars, the advantage is that it is 30% cheaper today than it was 10 years ago. So, there is a very strong incentive to purchase London residential today,“ said Durrani.
He made it clear that this is purely a currency advantage.“It is not because values in London have fallen 30%, because that hasn't happened,“ said Durrani.
Studies commissioned by Taylor Wimpey Central London, a part of the FTSE100listed Taylor Wimpey Plcand a leading developer in this niche market, also have come up with similar research on the forex fluctuations aiding the realty market globally
The developer's sales & marketing director Darren McCormack said, “We've engaged quite a few forex companies to try and gauge this. And a lot of them reckon that it's going to take a good handful of years to get back to its previous strength. So, this advantage is going to stay for the overseas buyers."