Buying a home in Kerala: Is this still the dream for young Malayali expats in UAE?
Financial goals for young expats have changed, even more so after the COVID-19 pandemic
Dubai: Kerala, as a state, has one of the largest expatriate populations in India. In the Gulf region and in the UAE too, Malayalis account for one of the largest expat populations in residence. As per the Kerala Migration Survey 2018, there are 2.1 million Keralites who reside outside the country, a majority of whom are based in Gulf countries.
For many Kerala expats who fall in the boomers’ generation, and for previous generations too, building or buying a home in Kerala was a priority. Most planning in advance for retirement in their home state. Even with small salaries, many expats ensured that their houses back in Kerala were their ‘dream homes’. However, for later generations, financial priorities have changed, and not just for expats from Kerala. COVID-19 and the financial uncertainties that the pandemic triggered have also contributed to these changes.
We spoke to a section of young Malayali expats in the UAE to understand whether the age-old dream of having a home in Kerala is still a financial goal.
Financial freedom to pursue dreams
Elma Bartholomew, 33, communications strategist said, “My decision to move to Dubai had a lot to do with the level of exposure this city offers, from getting to work with international brands and what we loved to call “glocal” businesses to interacting with people from all over the world.
My brother retired at 31, and he motivated me to begin investing in a pension plan for myself.
“Building a home in Kerala was never my biggest priority as I am not considering settling there right away, and my parents had already invested in this for us. My brother retired at 31, and he motivated me to begin investing in a pension plan for myself. This is my last year of payments, and his advice has got me very close to financial freedom. I might not be as quick to retire because I love what I do, but I am quite happy to know that I will be able to enjoy a proper sabbatical in the future.”
Bartholomew’s goals are in line with what millennials and Gen Z’ers around the world are focused on – early financial freedom. What financial freedom is looks different depending on personal goals.
According to a report by Barclays, 38 per cent of millennials pointed to having disposable income at the end of each month as financial freedom. For others, paying off their bills in full felt like financial freedom. Nearly a third added that being able to treat themselves without worrying about their bank balance also would feel like financial freedom.
The same report showed that Gen Z felt that being able to stop full-time work and/or being on track for early retirement would mean financial freedom.
For Barthelomew, being able to follow her passion is a key need in her journey towards financial freedom. She said, “My long-term goal is to move into the art industry and would love to spend a few years studying art in Europe. For me financial freedom is to be able to do this without worrying about having a steady paycheck, and to have enough of a backup to at least accommodate a student lifestyle. This is what I see as my sabbatical years.”
Good investment option
Sunita*, 33, who has already started investments towards a house in Kerala, said, “Personally, I have invested in home and I think it's a good investment. Current generation see homes as an asset and want to purchase one so they can grow their investment through monthly mortgage payments and benefit from future inflation and appreciation. Apart from that there are other options like fixed deposits and Insurance which I think will help in the long run.”
Choosing a good property
“Despite the growing popularity of products like mutual funds, traditional investments like fixed deposits has not lost their flavour with Malayalis, if you ask me. This popularity is easily understandable as they promote disciplined savings and assured returns despite any market conditions. Then comes insurance. Current generation take responsibility at a young age and we learn the importance of insurance. Its role in protecting the financial future of our loved ones makes it more popular among youngsters,” she added.
Investing in UAE is the priority
I don't believe in materialistic assets after COVID. It's important but I rather spend my money in experiences with my loved ones
Elizabeth Abraham, 33, is a communications manager for a hotel in Dubai and she said her goals have always been to invest. Abraham added that her goals now included creating multiple sources of income. She said, “Investment is a big priority post and pre-COVID. I've invested in multiple portfolios and that's not going to change because financial security is a priority.”
In terms of a home in Kerala, Abraham’s stance is clear. “That was for our parents’ generation, for now the reason I would spend money and time in Kerala is to create memories with loved ones back home.”
Speaking about the change the pandemic has brought to her financial goals, Abraham said, “I don't believe in materialistic assets after COVID. It's important but I rather spend my money in experiences with my loved ones.”
Abraham is set on investing in a property in Dubai that can give her returns, and she has set a timeline of two years to be able to do it. “I am working on getting multiple streams of income. Not just my current salary. So trying to get my side hustle sorted now,” she added.
Having additional income sources is one of the leading financial trends of 2022, with millennials in the lead with the trend. Termed ‘side hustles’, these income sources need not be major to make an impact on financial goals. A survey conducted among millennials in America, that was published in The Motley Fool, the median income for a side hustler is $200 (Dh734) per month while the average is $686 (Dh2,517) a month.
Affiliate marketing in the UAE
Popular side hustles include online businesses such as blogging, affiliate marketing etc. Others include freelance services, e-commerce, investments, and service-based businesses.
Migrating to and retiring in another country
Roopa Kurian, 36, who is a new mom to twins, felt that more than a home, they would try and invest in an opportunity to migrate to another country where the family could settle, and where the couple could retire.
“Both of us are not interested in homes in Kerala because our parents already have done that for us. What we would ideally do is save money to move and settle in another country, other than India. However, with the birth of our twins, we have recently transitioned to being a one-income household; so the goals and the timeline have changed for us as a family,” she said.
Many couples now plan their transition to single-income households in advance to avoid sudden shock in expenses and earnings. If you are also planning on shifting this way, there are four steps that can help you deal with the sudden loss of income.
Roots and financial freedom
Other than having a home back in Kerala, one of the important priorities would be to have financial freedom.
Hilton Jacob, 33, finance professional explained why he would love a home in kerala but his goals also include financial freedom, and said, “When I moved to Dubai, my aim was to have exposure working with multicultural people in a multinational company. I would definitely invest in a home back in Kerala as it is my home, and I wish to have my own space rooted to my home.”
“The status of being an expat was never a long-term goal. Other than having a home back in Kerala, one of the important priorities would be to have financial freedom; I have plans to invest in share markets.”
“COVID did not change the investment plans. It helped us to find different ways to subsist and helped us become stronger. I must say this mentality came from being an expat, and I could not afford to risk my priorities.”
Survival over investment is the goal
Lincy Stanley, 35, works in the real estate industry, and explained why despite the fact that having a home had always been her dream, COVID-19 drastically changed her goals. She said, “I have been hoping to invest in a home for the past 10 years. However, the real estate prices are getting steeper or I get scared of putting my entire savings into one pool and I hesitate.”
Is investment still a dream for Stanley post COVID? “Yes, it would be ideal if I could still invest in a home. However, no, currently I cannot. With COVID having affected my previous job, I no longer have job security in what I do. So right now it does not seem the wise decision to put all my savings towards a home which to rent out could be even harder in the current market.”
“Today my priority is to survive. Survive without losing the joy of living. So right now, COVID has re-routed my aspirations to figuring out how to pay my annual rent next year while maintaining a similar standard of living that I am used to without cutting down on the small joys of life.”
Liquid cash is the most important
Vidya Rajeev, 38, is based in Dubai (currently in India) and her experience is similar to that of Stanley’s in terms of a drastic change in financial priorities. Rajeev lost both her parents to COVID and the pandemic brought financial difficulties that have now changed her perception towards money matters.
She said, “Investment plans don’t carry any meaning, because when one gets hospitalised new terms and conditions arise due to which I believe you need to have liquid cash.” Rajeev added that she would rather keep money in a bank to which she has easy access, because of her personal experiences during the pandemic.
Rajeev also has a [residential] property in Mumbai, which the family is still paying for.
“If I would want to invest I would keep money in my bank rather than investing as I personally suffered losses of my family, and I know how it was difficult for me to arrange money, or to sell my gold, how to sell my land and houses when [cash was] required.”
*Name changed on request