Over the past few years, the international real estate sector has witnessed a significant increase in inflow of investment from Chinese buyers. Countries like Spain, Portugal, and even the USA are trying to attract investors by offering permanent residency through investment immigration programs. Investors are also being courted with significant tax benefits.
Chinese investors, seeking the twin benefits of relaxed residence requirements and attractive returns, have been active seeking good investment opportunities all over the world.
Global firms specializing in high-end real estate opportunities confirm that investment from Asian countries including China and Singapore has played a significant role in boosting global real estate demand. Some firms have established regional offices in Asia to help facilitate flow of investment into the USA.
A recent report by the IMF indicates that the Indian economy’s growth rate may exceed the pace of growth of the Chinese economy within the next two years. India grew at 5.8% in 2014 as compared to China’s growth rate of 7.4%. However, India is expected to grow faster at 6.3% and 6.5% in 2015 and 2016 respectively. Real estate firms who focused solely on China are now gearing up for inflow of real estate investment from India.
While a booming economy may not translate into immediate increase in flow of Indian investment into the global real estate market, firms are adopting a strategic approach and trying to exploit the long-term impact of India becoming the fastest growing economy in Asia.
Real estate firms in Portugal are already witnessing a steady increase in inquiries from wealthy Indian investors who have interest in acquiring secondary residences in Europe and the EU. Firms anticipate faster inflow of funds as the combination of rapid domestic growth and the implementation of economic reforms enable Indians to acquire the financial means to purchase properties abroad.
Spain, another country that offers a golden visa program to investment immigrants, is also aware of the potential advantages of engaging with Indian clients. Spain has always been a popular destination for real estate investors due to its low prices and attractive facilities. The recent fluctuations in currency values may provide additional benefits to smart investors who are prepared to take the plunge early.
The Reserve Bank of India too has, with its liberal policies, contributed to growth of investments from India into the global real estate market. The RBI has lifted the bar on outward remittances from the country, and has increased the annual investment foreign real estate investment ceiling from $75,000 to $250,000 per year.
If the IMF’s predictions prove accurate, then it is likely that investors from India will have a major role to play in the global real estate market.
Spain has always been a preferred destination for Indian tourists with more than 8M out of the 65 million tourists visiting Spain in 2014 coming from India. Real estate firms are looking forward to expanding its Indian clientele which has a reputation of being ‘high-quality’ tourists who reside in the country for long durations and spend money liberally.
Hence, the inflow of Indian investment is expected to provide a boost to Spain’s luxury property market.
In fact, real estate firms in Spain expect the flow of investments from India in the coming years to match the Chinese immigrant investor market. Considering the pace of reforms in the country, industry watchers are hopeful that India will fulfill its potential to become a major investor country in the global residence real estate market.
Whether the expectations of the global real estate market will be fulfilled, and whether India will match China as a preferred source of investment will depend on the extent to which the country fulfils its economic potential.
Source: Propertysecrets.net