NRI Investment Back in Indian Real Estate Market !

Admin | Jan, 18, 2022

The real estate sector of India has always been a continuously-growing industry. This sector is not only one of the biggest employment generators but a major GDP contributor as well with a 7% contribution and it is projected that it might turn out contributing 13% to the Indian economy by the end of 2025.

But the occurrence of Covid-19 from the last two years brought a huge disturbance to real estate. And it ain't hidden from anyone, property prices in top cities of India have witnessed a plunge by 2-9%, but this was happened in the first quarter of 2020-21 due to lockdown. With the onset of 2021 and in 2022, real estate is now on the track of the fast route. And the credit goes to government initiatives & policies, discounts & offers from builders, and affordable home loans from banks.

NRI investment in India

Not only the domestic consumers are inclined towards real estate investment, but even NRI investments have also been rising significantly. The fact that real estate developers in India had, always, launched and promoted their residential projects in big cities with almost special attention on NRI buyers is no secret.
Responsively, NRIs have continuously invested in India with investment or rental income points of view. But when Covid-19 struck globally, everyone was forced to isolate themselves and at that time this community realized the actual value of having a home in their Mother Land. These individuals are also seeing ‘now’ as a perfect time to buy a home as there are lots of benefits.

Before describing why this is the best time for NRI investment, let’s have a look at these facts.

INR 1 Cr – INR 4 Cr the preferred budget-range for 75% NRIs post-COVID, against 41% pre-COVID; 3 & 4 BHK apartments in top demand
Bengaluru, Pune, MMR, and NCR are the favorite investment destinations for NRIs
65% NRIs preferred ready-to-move-in options
85% of NRIs only buy properties from reputed real estate developers

Growth of luxury housing

An interesting twist has taken place in this post covid era, NRI’s once again hunting for the best luxury homes in India. According to the surveys & reports from many experienced real estate think tanks in India, approx. 75% NRIs now looking for properties between INR 1 Cr – INR 4 Cr. Before 2019 just 40% preferred properties within this price range. 3 and 4 BHK apartments are currently top on their preferred list.

Bengaluru with 24% and Pune with 19% are magnetizing massive attention from the NRI’s real estate investors. Collectively, these two cities observe approx. 48,370 units sold in 2020-21 – registering a 35% sales share amid the top 7 cities of India.

Top Preferred Cities for Investment BY NRIs

Bengaluru: 24%
Pune: 19%
NCR: 16%
MMR: 14%
Hyderabad: 12%
Chennai: 10%
Kolkata: 5%

Preferred Constuction Stage By NRIs

Ready to move in: 67%
To be ready in 6 months: 14%
New launches: 10%
To be ready within year: 9%

Government Initiatives & other points that make a favorable investment setting for NRI investors

The introduction of RERA has been the biggest risk-reducing factor not only for Indian buyers but for NRI’s as well.
Best discounts are extended to NRIs in residential as well as commercial properties. This attracts more investment from NRIs.
The introduction of REITs (Real Estate Investment Trusts) has made investments in commercial properties more fruitful for NRIs.
The central & state government policies and newly introduced rules have brought in more answerability and transparency, making the real estate sector of India buyer-friendly.
The dollar getting stronger against rupees indicates that NRI investors can now buy more & the best in India than what they could a few years back.
The rising demand for commercial & retail properties is another appealing factor that attracts more NRI investors in Indian real estate. The new trend of co-working spaces has been gaining momentum in big cities of India, making this an attractive scope for NRI real estate investors.
The constant political dispensation in India and the robust government policies and support declare financial affluence while presenting the best security from the external threats of border disputes. Now, any type of investment is considered safe in India, and among all NRI Real Estate Investment in India is the best.

NRI investment in Indian Real estate

There has been a massive development in the services industry in India over the two decades, and there is a big potential for further development. And this is an exceptional sign of the projected demand for real estate, especially in the commercial, retail, and residential sectors.

The trend of rentals against investments in the residential and commercial developments— not just in the big metropolitan but in the small cities has been booming well. All these points work well for the future of real estate in India.

And how can we forget about the ‘Make in India’ step launched by the government of India demands for increased indigenization of several industries? If this works well, it will lead to a new expansion of the real estate industry into new destinations.

Conclusion

For NRI investors, the collective consequence of these numerous factors has made this the best time to invest in the real estate of India. Residential & commercial property prices have withstood the hit of COVID-19 and can only go rising from this point. On the other hand, just like every good thing or scheme comes with validity, some of the best advantages like affordable home loans and stamp duty will also come to an end. Think and respond quickly, as there is no time like the present for NRI investors to make their smart move in the real estate of India.

Is real estate a good investment in India for NRI?

NRIs have real estate as one of the key factors to drive sales and around $13.1 billion was invested by NRIs in the Indian real estate market in FY21, and this is expected to grow to $14.9 billion in FY22.

Why NRIs should invest in real estate?

Foreign income earned by NRIs can be converted into lucrative investments in India thanks to this unique advantage. Currently, the rupee value is at an all-time low of Rs 75+ against the dollar, which has made investments in real estate more accessible.