Indian investment in UAE, European real estate spikes amidst attractive rental yields

Indian investments into overseas real estate, specifically in Europe and UAE have witnessed a surge driven by immigration programmes such as the Golden Visa, and attractive rental yields exceeding 7%, reported Moneycontrol. This comes evern as the real estate prices in UAE are rising at the rate of 16-19% annually.

Real estate investment

As per RBI data, Indians remitted Rs 240.2 crore in December 2023 for purchasing immovable properties abroad. This was a notable increase from Rs 206.8 crore in the corresponding period the previous year. Likewise, FY23 also saw remittances worth Rs 2,714 crore which was a 38% surge from Rs 1,961 crore recorded a year earlier.

Real estate market's immovable property includes residential properties, warehouses, manufacturing units, and factories.

Also Read: Number of ultra rich in India to grow at 50% by 2028: Knight Frank

European countries like Greece, Cyprus, Malta, and Spain are also witnessing heightened real estate demand for immigration purposes.

"Typically, the application process for Golden Visa programs takes about 3-4 months, with investors anticipating citizenship within 5-7 years," Ritesh Mehta, Senior Director, Jones Lang LaSalle told Moneycontrol.

Golden Visa offers residency or citizenship to those who invest in real estate, government bonds, or other approved vehicles.

Rental Yields

As per data from Dubai Land Department as cited by international property consultant Vestian, India emerged as one of the top investors in Dubai with cumulative investments of $335 million across 123 projects during the first half of 2023.

Moneycontrol quotes Vijay Sawlani, a Dubai-based consultant at Property Junction and said that the average investment ticket size in Dubai ranges between Rs 4-4.5 crore, depending on the location and property size. The rental yields typically range from 7-9%, with prime locations like Downtown or Business Bay boasting short-term rental returns as high as 11-13%.

The minimum investment requirement to get a Golden Visa for Dubai for 5-10 years involve 2 million dirhams, or about Rs 4.5 crore.

"In prime Mumbai areas like Andheri, property prices range between Rs 38,000-45,000 per square foot (psf), whereas in Dubai's newer emirates like Sharjah, Ras Al Khaimah, and Abu Dhabi, prices range from Rs 25,000-35,000 psf, which is more affordable," Vijay Sawlani told Moneycontrol.

As per Moneycontrol the current rental yield in Sharjah and Abu Dhabi range from 6-8%, while Dubai has the highest yields, at 9-10%.

Investment in Europe

To get permanent residencies in countries like Greece, Cyprus, Malta, and Spain the investment must range between Rs 4-8 crore. As per Moneycontrol, the rental yield in such places on an average is 4-5%.

The report further mentioned that the entry level investment in Europe vary, starting from Rs 2.5 crore in rural areas, to Rs 8 crore in metropolitan cities. Greece, in particular, offers one of the cheapest residency programs, with popular destinations including Athens, Thessaloniki, Mykonos, and Santorini.

Other countries like the US and UK require higher ticket sizes, ranging from Rs 8 to 20 crore, with lower rental yields of 3.5-4%, and primarily attract high net worth individuals.