Real Estate: The Present (and Future) of Australia’s NRI investments.
We’re closing on the year 2017, a year which brought along the birth (or implementation) of new changes and policies in Real Estate trends, both for Indian residents and Expats. Along with that, 2017 is the year we created Reobee.com, a “first of its kind” platform where NRIs all over the world are using to make real estate deals, buying exclusively from each other and meeting remotely.
Our platform is widely used by NRIs and, because we’ve talked before about NRIs on the USA, Canada, the UAE, UK, Singapore and more, we’d like to cover a very closely related and important part of the ever-growing Indian diaspora (the biggest in the world): The NRIs currently residing in Australia.
How Big is the Indian-Australian Diaspora?
Indians found their way to Australia more than 4000 years ago, and currently are one of the fastest growing communities in this country, taking into account descendants and expats. India has been the 4th most significant source of immigrants at the start of this century to Australia and has managed to triple the migrant number every 6 years, now being #1.
Indians constitute 15% of the migration programme in Australia and are also the fastest growing population in Australia. Indian descendants even score one of the highest professional communities, with Australian companies routinely issuing work visas to Indian students and graduates due to lack of government funding.
A total of 243,000 Australian residents has declared to be Indian, and the states with the highest concentrations are New South Wales (57,156), Victoria (52,853) and Western Australia (15,157). Victoria, demographic and culturally is considered the Indian capital of Australia.
So, where does the money go?
One of the most common complaints about NRIs that go to Australia is the ever-growing rent costs in the most popular destinations. As such, NRIs in Australia often look to buy and rent properties in India while they appreciate and quickly selling to repeat the process.
Currently, India has a higher number of people living in urban areas (377 million) than the entire population of the US (approximately 314 million), and it is estimated that by 2030, this number is likely to increase to 590 million people, most of whom would live in 60 cities.
Because of this, and the inability of the development industry to keep up with the population growth, Australian NRIs tend to invest in the states of Uttar Pradesh, Maharashtra, West Bengal, Andhra Pradesh, Tamil Nadu, Bihar, Rajasthan, Madhya Pradesh, Karnataka, and Gujarat, some of which present the highest rates of property on demand.
In these places, NRIs are also prone to find opportunities such as the following:
- Tamil Nadu is quickly converting most of its villages into cities, therefore increasing industrialization and requiring a boost in basic apartments. As this happens, projects struggle to find investors, which has led developers to lower prices.
- Uttar Pradesh has found itself with significant differences to Tamil Nadu, with developers’ main interest being completing unfinished projects to avoid falling into RERA purview. This, however, has led to a similar result to the one seen in Tamil Nadu, with discount prices being offered in complexes almost certain to be finished soon on the peak of a shortage of living spaces.
- Cities in this area, such as Patna, have found attractive appreciation rates over the last three years, with Bailey and Boring Road leading with an average of 31%.
- Rajasthan Industrial complex is a job-source that results attractive for NRIs to buy property to rent, with some of the most important companies of India taking advantage of its closeness to New Delhi and relatively cheap costs of estate and living.
- Considered an exciting tech hub, Jaipur is also a recurring zone. Sirsi Road properties have increased their prices by almost 50% over the last 5 years, and at a maximum of Rs 3,100 per square meter, they’re considerably cheaper than Malviya Nagar for investors while performing better over time. Jaipur as well offers similar perks to the previously mentioned areas.
Without a doubt, given these facts, Australian NRI’s should focus on investing on property underdeveloped, as companies are now enticed by RERA’s imminence.
While still significantly more valuable when compared to the value of the Rupee in the international market, the Australian dollar’s value has dipped since the third quarter of 2014. This still hasn’t significantly impacted investments for NRIs as government “cleaning” policies in India have made still both feasible and desirable for NRIs to continue to invest back home.
Many Expats, in fact, have taken opening businesses that cater to the NRI middle class in Australia, helping them deal with purchasing property in India. Crowdfunding projects are also commonplace, and promised rates of return of up to 24% a year, certainly an exciting option for NRIs to analyze.
Australian NRIs made a total contribution of 2.5% of the total NRI investments this year, a significant part of a substantial total of $11.5 billion. The Australian government does not provide any official sources for this, and 2017 counts are not over yet, but it would be safe to say that at least 300 million in Real Estate investments have been put in by Australian residents.
Australian NRIs certainly have an opportunity of diversifying not only investing portfolios but also their heritage and prospects. Because of the growing costs of living in Australia (where homes appreciate to the 100% around every 7 years), many would argue that having a retirement option in India can present a good opportunity in case the Indian economy and living conditions do take off.
Regulation changes and globalization also have made it easier than ever for Expats to invest back in India, with making deals directly with NRIs made more accessible by these factors in the Internet Age. While Australia is still significantly pricy and Indian professionals rarely can afford to take time-offs, NRIs have used the Internet as a means to meet prospective buyers and sellers, exchange information and according to conditions, a new possibility for a young generation (most Australian NRIs are under 40 years of age).
If you or someone you know is trying to do property deals with NRIs, we would love to invite you to try our free platform, Reobee.com. We’ve created a place to safely post properties and talk with potential buyers close to you, without going through the hassle of dealing with Indian locals. Find a buyer just like you in Reobee.com! It’s free and will continue to be so.
Disclaimer: All the information presented in this blog is obtained through open and public information sources. Reobee.com doesn’t claim to have any exclusive insights, and information posted on this blog should not be considered financial or legal advice.