Indians bought residential properties in the U.S. estimated at $5.8 billion in value terms for the year ending March 31, 2014.
A report by the U.S. National Association of Realtors (NRA), released in October, said the investment magnitude represented a growth of about 6 per cent over the previous year.
The report further said that Indians spent an average of $459,028 (Rs.2.81 crore) to buy properties across cities like Los Angeles, Las Vegas, Chicago, Dallas and New York.
“This is definitely an interesting finding. Indian high net worth individuals (HNIs), who have obtained American citizenship and are settled there, have several reasons for investing in properties in the U.S.,’’ Anuj Puri, Chairman & Country Head, JLL India, a leading real estate consultancy said. “Many Indians who have become naturalised U.S. citizens have business interests as well as families in major American cities.’’
Investment in the U.S. property market is once again favourable. After the steep post-Lehman downturn, countless investors had been able to snap up properties in American cities at unbelievably low prices, and these investments are seeing handsome returns now that the U.S. real estate market is reviving.
For resident Indians, the Reserve Bank of India (RBI) had earlier curtailed flight of Indian money by capping remittances and rendering investment into foreign properties impossible. “It was only recently that the annual investment ceiling for individuals to buy overseas property under the Liberalised Remittances Scheme (LRS) was increased from $75,000 to $125,000. It had been at $200,000 before being reduced to $75,000 and subsequently being hiked to $125,000. Buyers need to be allowed to commit more,’’ Mr. Puri told this correspondent.
The annual limit of $125,000, equivalent to Rs.75 lakh, broadly means that if an Indian resident wants to buy a house in the U.S. worth $ 460,000 (the average ticket size of apartments bought by Indians in the U.S. as per the NAR report), he can do so in three or four instalments with a gap of one year between every two instalments,’’ Mr. Puri said.
“There is no doubt a lot of interest in the Indian community to buy property in the U.S. but the RBI restrictions are not conducive to larger investments. There is a hope that the limit may be increased from the current levels in future,’’ he said.
