Why Indian HNIs eye homes in Dubai, London, New York
The covid-19 pandemic may have put international travel plans on the back-burner, but it has not stopped Indian high net-worth individuals (HNIs) from looking at other countries to set up base in—either as long-term residents or as citizens.
In 2020, wealthy Indians again topped the list of those making enquiries for “residence-by-investment” or “citizenship-by-investment” programmes. The number of enquiries rose from the 2019 levels, according to a facilitating agency. This is now likely to accelerate, as many HNIs consider shifting base to cities that offer better healthcare facilities, especially keeping in mind the response of various top cities during the pandemic.
India has been on the back foot in its response to the pandemic, especially the recent second wave. Full removal of lockdown restrictions are still some time away, lower-than-required levels of vaccination poses a real threat of a third wave. In the meantime, the three most desirable cities for most Indian HNIs—Dubai, New York London —are almost back to business as usual.
On 17 May, Dubai lifted its limited-capacity rules for hotels, which means such properties can now be booked to full capacity. Public gatherings, such as concerts sporting events, can also take place at up to 70% capacity for those who have been fully vaccinated against covid-19. These are just some of the signs of return to normalcy in Dubai. In New York, many capacity related restrictions have been lifted in response to the easing of the coronavirus pandemic in the region, rising vaccination rates. Major venues such as Radio City Music Hall Madison Square Garden are expected to open in July. Broadway theatres are scheduled to reopen in September at full capacity. Britain has relaxed restrictions on economic activity social contact. Lockdown measures have been eased in England, Wales most parts of Scotland, meaning that pubs, bars restaurants are now allowed to serve customers inside; museums, cinemas theatres can reopen; exercise classes indoor sports can resume.
The conditions in India are still some way away from normalcy. The second wave has been a catalyst for Indian HNIs to consider a second home in overseas destinations that have better preventive measures medical facilities. However, there are other reasons as well as to why many Indian HNIs are considering Dubai, New York London their primary or secondary base.
Easy credit, coupled with the ability to get an immediate residency status, ease of doing business a tax-friendly environment make Dubai a hot favourite. Despite the pandemic, Dubai’s economy is projected to grow 4% this year after an estimated 6.2% contraction last year. More than 4,832 real estate sale transactions worth AED 10.98 billion (about $3 billion) were witnessed in Dubai in April itself—the highest value in the past four years.
In London, the stamp duty holiday for buyers has been extended till 30 June, prudent investors have already made their real estate commitments snapped up homes in London. House prices in the UK surged over 10% during the last financial year; the highest since 2007. Despite the shortfall in supply over the past year, the sales transactions are expected to be up 45% year-on-year the value of homes sold in 2021 is expected to reach £461 billion (about $654 billion), with an average London home now costing about £500,000.
Across the pond, New York (home to 7,743 ultra-HNIs ) is witnessing similar trends. With the city opening up, many people are moving back fast. Properties are being snapped up fast as developers are offering a variety of deal sweeteners, including covering closing costs. New York City led the US in sales growth, with a 58% year-on-year spike in transactions in May; 40 residences were sold for more than $4 million in Manhattan itself in the final week of May.
Those sitting on the fence about purchasing an overseas asset in the world’s most coveted cities should consider making that commitment before it is too late. As prices continue to rise the supply reduces from when covid hit us first, the time to act is now.
Akash Puri is director, international business, at India Sotheby’s International Realty.
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