Meet the World’s Most Promising Buy-to-Let Property Investor

Meet the World’s Most Promising Buy-to-Let Property Investor

It started long ago with multimillionaire industrialists, Bollywood stars and heirs of India's wealthiest dynasties snapping up penthouses with panoramic views over Manhattan, stately homes in Kensington and opulent villas in Palm Jumeriah. As India's economy experienced a robust expansion, doubling from US$1.86 trillion in 2013 to US$3.73 trillion, the pool of savings among India's newly affluent population swelled, fuelling a search for stable, low-risk investment opportunities. Foreign residential property markets, along with gold and financial markets have become obvious targets.

Last year, according to Betterhomes, a UAE-based consultancy, Indian investors have surpassed their British and Russian counterparts, becoming the most prolific buyers of residential real estate in Dubai. Analysis of official data from the Dubai Land Department (DLD) by Property Finder reveals a similar pattern: Indians constitute 19% of mortgage borrowers in Dubai, claiming the largest share. British nationals follow closely, occupying the second place with 17%, while Emirati nationals account for a mere 6%.

Indian nationals or migrants of Indian origin are known for their preference for homeownership over renting. Even in the UK, where the homeownership rate is generally high, among the various ethnic groups, Indian households stand out, with a remarkable 74% owning their homes— the highest percentage of homeownership in any ethnic category, surpassing even the 68% ownership rate among White British households. But now, the appetite for owning a family hearth is being turbocharged by a generational shift.

Anshuman Magazine of CBRE, a property consultancy, points out that younger generations are set to drive the upcoming housing demand. A decade ago, 68% of Indian millennials not living with their parents opted for renting; now, 70% say they would rather buy than rent when they move next time. The share of those among Generation Z planning to buy is on the rise too, with the percentage of those renting dropping to 40%.

Whereas Indian buyers previously sought properties primarily for personal use or to secure homes for their offspring, today, real estate represents both an asset class and a means of wealth accumulation. A survey by Mumbai-based property consultancy Anarock reveals that real estate is now the preferred investment type, capturing 61% of preferences, compared with gold (5%), stock markets (26%), and fixed-income bank deposits (8%). Notably, millennials form the majority of this trend, with 52% of respondents identifying residential property as the most attractive investment opportunity, belonging to the generation born in the 1980s and the first half of the 1990s.

Stuart Leslie, International Sales and Marketing Director at Barratt Developments in London, highlights that the surge in foreign investment by younger Indians may be attributed to the affordability factor: house prices in Mumbai and Delhi have skyrocketed over the last decade, increasing by approximately tenfold to levels seen in the aftermath of the 2008 global financial crisis. Consequently, these prices are now on par with those in destinations such as London, Dubai, and New York. Barratt estimates that by 2026, Indian homebuyers could account for 15% of residential property purchases in London.

Housearch's analysis of its website data also supports this narrative. Indians top the list of the platform's most active users interested in purchasing residential real estate in the UAE, representing nearly a tenth of all prospective buyers. In comparison, Brits account for 7%, and Americans for 5%. Notably, two-thirds of prospective Indian buyers on the platform are in search of investment properties, with only 35% looking for homes to live in.

Approximately half of the prospective buyers access the platform from a select few affluent regions in India, including the metropolitan areas of Mumbai and Pune in Maharashtra, New Delhi, Bangalore, Hyderabad, and Chennai. Millennials are prominently represented, comprising 74% of this cohort, aged between 25-34 years. Their interest primarily lies in apartments (64%), with over half seeking smaller, 1–2-bedroom flats, perfectly suited for buy-to-let schemes.

With India on the cusp of economic superpower status, poised to swell its GDP to $5 trillion within the next three years and aiming for the $7 trillion mark by 2030, the landscape of the world’s most popular buy-to-let investment markets is quietly yet irrevocably being redrawn. Young Indians, their aspirations fuelled by an expanding economy and a cultural predilection for property ownership, are set to become the quintessential foreign buy-to-let investors of the future.

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