Dubai, touted to be the most popular
destination and world class investment to be in the Middle East began to
attend. A recovery in the property market after the financial crisis In 2012,
real estate prices recovered for the first time, up 10% y / y, depending on the
growth of Dubailand (DLD) authorities and refers to several regional media.
Real estate transactions in Dubai rose by 8% to Dh154 million in 2012.
As expected, the recovery supported by
massive investments by foreigners, particularly India. Non Resident Indians
(NRIs) are easily among the five investors in the region. With their natural
affinity for India and the depreciation of the Indian rupee against the dollar,
real estate investment decisions NRI community is changing for the Indian
market?
For the Indian real estate, the
general perception among buyers / investors is that prices have risen
significantly in recent years. ~ 40-42% on average in all major markets - immediately
after the collapse of Lehman period, the Indian real estate prices rose
significantly ( As per sources data- see table below)
Even in cities like Mumbai, where the
assets are already high, the yield is 66% over the same period. In this
context, there is evidence DLD property prices in Dubai fell by 65% in the
four years before 2012, that the existence of a rally of 10% justifies in 2012,
is actually the only thing that matters
More recently, the Indian rupee (INR)
was 12.0% devaluation against the dollar since the beginning of May to June
2013, pushing down the value of all other currencies pegged to the U.S. dollar
- including the United Arab Emirates Dirham (AED). As a result, the Indian
rupee has also depreciated against the dollar by ~ 12.0% over the same period.
A return envelope calculation suggests
that if an NRI based in Dubai invests AED 10 million in Indian real estate now
(INR / AED 16.4), and assuming that the Conservatives property returns 15% in
India in a short time would likely return the "investor back more than 27%
under the assumption that the INR will return to the pre-14.8/AED can mean (see
figure).
Just add approximately 12.0% due to
fluctuating exchange rates are comparable with the 10-12% expected DLD term
investments in Dubai real return on total property. Similar performance can be
expected additional investment of NRAs in other parts of the Middle East, where
the local currency is mainly associated with the U.S. dollar (see Table 1).
One could argue that the Indian
expatriates are promoting Dubai in Indian real estate based on socio-economic
and other. According to media sources, Indian investors buying property in
Dubai, because it is a relative political stability, world class
infrastructure, tax incentives, attractive prices and geographical proximity.
Moreover took Dubai's economy over the past two years to complete, an increase
of 4.4% and 3.4% in 2012 and 2011, respectively.
However, a recent study conducted by
Sumansa Exhibitions, the organizers of the annual event called the success of
the show in India UAE property a different picture. The survey shows that NRAs
a higher intrinsic value of a property belonging to India or Dubai property can
put elsewhere.
Aside from strict rules on visas in
the Middle East, there are certain legal obstacles to buying real estate in the
United Arab Emirates. Other important factors that can help to NRI interest in
the Indian real estate market - of which:
The economic growth in India
Improving care infrastructure and
policies concerning the conditions of new infrastructure initiatives
The growing demand for commercial
space in the market (which leads to job creation)
Social infrastructure
The evolution of prices.
Putting these results in perspective,
the recent decline in the Indian rupee act as the trigger for the NRI community
to continue to focus on the property back in India. In the Middle East
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