In a recent circular [RBI/2014-15/132 A.P. (DIR Series) Circular No.5] the RBI has raised the remittance limit up to US$ 125,000 per individual, per year and removed the restriction against the purchase of property.
A new survey shows that while London was one for foreign investors, the rest of the top five cities were all in the USA. The survey said the U.S. is the “stable and secure” country for real-estate investment “by a wide margin.” The U.S. is also the top market when it comes to capital appreciation and for future real-estate purchases.
The business of buying-and-renting houses, long dominated by local mom-and-pop investors, has morphed over the past two years into one of the hottest investments on Wall Street. Dozens of pension investors and private-equity firms, such as Blackstone Group LP and Colony Capital LLC, are clamoring to buy homes in beaten-up markets, sometimes using money from foreign co-investors… “We are buying the houses up, and I’d say unashamedly at very, very cheap prices, but I don’t see much of us crowding out other home buyers,” said Mr. Dixon of US Masters…
Flush with cash and keen to diversify their portfolio, Indians are busy snapping up property in the US. And they are not Indian-Americans, but desis from Mumbai, Delhi, Bangalore and Hyderabad, who are picking up single-family homes and condos as vacation homes or just investment.
A survey released Monday showed that the six-year slide in U.S. housing prices, coupled with the rising value of some foreign currencies and continued instability in Europe, is fueling a property-buying binge in the U.S. by wealthy foreigners… Some foreigners buyers view U.S. real estate as a safe place to park cash amid fears of a property bubble or political instability at home. Others are buying as a hedge against inflation because real assets like property tend to hold their value better than other investments during periods of high inflation. At a time when most securities have low yields, some investors believe they can earn higher returns by buying U.S. real estate and holding it as a rental investment or reselling in a few years at a profit.
The reason is perhaps not hard to come by. Rohit Prakash, President – American Full House LLC says, “In the last few years property prices in India have risen significantly. Investors who invested at the lows in India have gained from this rise. They are now looking at booking profits and investing in other assets that are available at reasonable valuations. The US real estate market is one such avenue where prices are currently at the lower end of the range with potential for strong upside. In addition, while smaller investors may be hard pressed to find good properties at $100,000 in India very easily today, there are quite a few such opportunities in the US.”
Miami-area home sales held at a five-year high in September, rising 15 percent from a year earlier as price reductions and super-low mortgage rates helped stoke year-over-year sales gains across the price spectrum. The median sale price fell short of the year-ago level for the 48th consecutive month but the magnitude of the decline – 1.5 percent – was the smallest yet, a real estate information service reported.
Rohit Prakash, based in Austin, Texas, has for long been doing brisk business helping Americans and foreigners buy and sell property in the capital of one of America’s biggest states.
Recently, he set up American Full House to cater to Indians looking to buy homes in locations that have seen a huge price drop. An Indian buyer who contacted him sometime ago is close to doing two deals in a suburb of Los Angeles at $82,000 and $85,000 each for a three-bedroom condominium. At the peak of the housing boom, these properties were selling at close to $250,000.
Indian buyers are mostly exploring cities such as Los Angeles, Las Vegas and other parts of southern California and Phoenix, and Miami, where prices are still 60% lower than the peak.
Prakash of American Full House points out that rentals in most American markets are still high as people who have foreclosed their homes are looking to rent out property. “One could easily get a return of 6-10% in many markets here,” he says.
A spokesperson of the National Association of Realtors attributed the international appetite to the fact that properties in the US are less expensive compared with foreign properties. Homes in the US are viewed as a secure investment. The average price paid by an international buyer in the US was $315,000 and the states with the heaviest concentration of such buyers are Texas, Florida, California and Arizona. With more and more Indians likely to join the rush, the list is only likely to expand.
When the real estate market collapsed five years ago, this city’s downtown soon became an emblem of the worst excesses of the building boom. Glittering new towers sat mostly vacant.
Those towers are filling up much sooner than some analysts predicted. The new arrivals, mostly renters, are spurring the establishment of restaurants, bars and shops.
Condo sales here began surging after property owners slashed prices about two years ago, sometimes by 50% or more. … Fewer than 4,000 out of the 22,000 new units built since 2003 remain unsold, according to Condo Vultures.
At one time, these people would have invested in the U.S. stock market. Now they see the opportunity of a lifetime in the nation’s debilitated housing market. The idea is to rent out the properties and then sell them once the economy turns around.