The recession in the global world economy and the real estate sector is temporary, say experts. They believe that the industry will recover from the lull soon and people will, once again, start investing in properties.
India Sotheby’s International Realty conducted the 4th edition of the Global Luxury Realty Conclave’s webinar on May 28th and discussed trends and forecasts of international real estate investments.
The panellists were Ian Plumley, Senior Vice President for Middle East Asia & India, Berkeley Group Plc; Mae Bagai, Global Real Estate Advisor, Sotheby’s International Realty, New York; Mohammed Asaria, Managing Director, Range Developments, Citizens by Investments, Grenada; Akash Puri, Director, India Sotheby’s International Realty and KT Chandy, Partner-in-Charge of Kerala for EY, India EY. The discussion was moderated by Ashwin Chadha, President, India Sotheby’s International Realty.
Excerpts from the discussion:-
Ashwin Chadha: The current market situation is different from the market before the pandemic hit. What’s your take on this when it comes to the New York market?
Mae Bagai: This pandemic is very different. it’s not a global recession and this is a temporary pause. The economy was doing great before COVID-19 and the market was just back up. This is only a temporary situation that we are in. The global recession a decade ago was a larger phenomenon and it had lasted for a very long time. This pandemic pause will last for two-quarters maximum and the markets will come back up. In fact, the stock market is already rising.
Ashwin Chadha: A recent articleon statistics related to the Liberalised Remittance Scheme flow by resident Indians highlighted a jump of $18.75 billion for the financial year 2019-2020. The article indicated that the bulk of this money was spent by Indians in education and travel. Mae, how are you leveraging this to spur real estate demand?
Mae Bagai: Indian nationals are keen on sending their children to Columbia University, NYU and a lot of other popular universities in New York City and the surrounding areas. So when they are looking for housing for the child who will be studying in NYC for 3 to 6 years, they prefer to purchase the property instead of renting it. Indians in that way are building equity when they buy the place.
Akash Puri:There is also a currency element in play when Indians buy a property overseas. Because the value of USD has only risen, it only works as a double opportunity. They end up buying a property as well as they get an appreciation on the money. From a conservative point of view, in such cases, the appreciation in the capital is around 5 per cent and in terms of the currency play, there’s an appreciation of 2 to 3 per cent.
Ashwin Chadha: Citizenship by investment is a fast-paced, emerging theme amongst the HNIs and UHNIs community especially the next generation. Asaria, can you please speak about citizenship by investment scheme in Grenada.
Mohammed Asaria:Grenada has catapulted in the last 12 months in terms of citizenship by investment ranking, globally. This happened around the start of 2019 when the Grenadan government made legislative changes and also opened their doors for investments in the Sixth Sense Resorts. Grenadian citizenship provides global mobility i.e. a person can travel to 140 countries like Russia, China, UK, Latin America and more without a visa. Citizenship can be acquired in just three months. It’s cost-effective, as an investment of $2,20,000 in the resort qualifies you and your family for citizenship. The investment has to be kept for five years and following that there’s also an exit plan.
The reason why this scheme is also opted for by people ls because of a treaty between Grenada and the US. So if you are a Grenadian you can subsequently invest in the US in your own business for around $1,00,000 and in a period of two months, you and your family can obtain a US residence visa valid for five years and renewable indefinitely. The best part about the Grenada-US package is that interested parties don’t have to leave their countries to get a passport.
Ashwin Chadha: Akash, what are your top picks in terms of citizenship by investment in the EU?
Akash Puri: People like to go to Europe for a lifestyle, which is a bit different when from when they take a passport from Grenada or when they want to get into the US. Spain and Portugal, both, provide citizenship by investment and good options in the US. In Portugal, you invest €5,00,000 in assets and you get a passport after 6-7 years while in Spain with around a similar scheme you get citizenship after a decade.
Ashwin Chadha:So Asaria, have you received any enquires from Indians about the Grenada-US package since the lockdown?
Mohammed Asaria: We have not seen any slowdown in the enquiries by Indians regarding this. The current pandemic break has set a momentum of thought amongst Indians in India and the Gulf as well as amongst the NRIs about their business security. The sentiment amongst them is that it’d probably be better to invest the savings in a way that helps them to migrate to the US for security and for the future of the children. The pandemic has provided a chance to reflect. So more and more Indians are keen on investing abroad and eventually migrate.
Ashwin Chadha: So Akash, can Sotheby’s provide a one-stop service for citizenship by investment-related enquiries?
Akash Puri: Absolutely. 100 per cent with a smile!