Strong rupee helps Indians buy homes in London for cheaper
Indian luxury home buyers found it cheaper to buy homes in London than the previous year.
- Indians found London luxury homes cheaper by 14% than the previous year.
- Property prices in London declined by 6%.
- Indian investors had the second highest purchasing power for properties in London
Strengthening of Indian rupee has made sure that Indian buyers pay purchase homes for 14% cheaper in London.
A report by Knight Frank Global Currency report on Thursday said that luxury homes bought by Indians in London in the March ending quarter of 2017 were significantly cheaper as compared to the same period last year courtesy the strengthening value of the Indian Rupee (INR) against the Great Britain Pound (GBP).
“A parallel analysis of property prices in London between January 2016 and December 2016 showed that luxury homes in the British capital was 20.4% cheaper for INR denominated investors,” the report said.
It attributed the strengthening of the rupee to Britain’s decision to break away from the European Union (EU) in 2016.
“The weakening pound in the wake of events such as Brexit made properties in London 14.1% cheaper for INR denominated investors. As a result Indian investors had the second highest purchasing power for properties in London only behind the Russian Ruble denominated investors,” the report said.
“Traditionally Indians have had a penchant for buying properties in London. Over the past couple of years the Indian currency has significantly strengthened against major global currencies on the back of some significant reforms. To top it up geopolitical developments in the UK starting from the Brexit had its bearing on the property market with decline in prices close to 6%,” said Dr. Samantak Das, chief economist and National Director, Knight Frank India.
The rupee was touching the Rs 66 mark against the dollar value in March this year; while the Great Britain Pound (GBP) was trading near GBP 1.2 against the US dollar, as per data from Trading Economics.
“Until the March-ending quarter of 2017 the Indian currency appreciated by 14.1% against the Pound Sterling in comparison to the same period last year. But when compared to June 23 2016, the day of the Brexit referendum, the Indian currency was stronger by 18.7% until Q1 2017. That explains why Indians now regard property purchases more attractive in London,” Das added.
Although the rupee is currently on a depreciating trend it had hit a ‘two-year’ high earlier in August amid heavy selling of dollars by foreign banks with the central bank decision to cut interest rates. It is currently hovering around Rs 64 against the dollar rate.
The dollar had briefly hit a 15-month low against the basket of major currencies on August 1.