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Uprising NRI investment in Indian real estate market

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The real estate industry has always been an ever-evolving sector.

Uprising NRI investment in Indian real estate market
The real estate industry has always been an ever-evolving sector. It is not only one of the major employment generator markets but also contributes 7 percent to the country’s GDP and it is expected that it might end up contributing 13 percent to the country’s economy by 2025.
The occurrence of the pandemic last year brought about major disruptions in the Indian real estate market. As per a survey by Magicbricks, one of the leading online property marketplace, real estate prices in top metro cities witnessed a dip by 2-9 percent in the first quarter of 2020-2021 due to lockdown.
However, since the onset of 2021, the sector is walking on the path of revival. While the journey does seem tough, but the shift in the consumer psyche has played a pivotal role in the sector’s growth. COVID-19 brought about a lot of instability and hence consumers are now considering real estate to be the ideal and stable investment solution.
Rising NRI investment in Indian real estate market
While the domestic consumers are inclined towards this trend, even NRI investments have been growing significantly. As per a report by 360 Realtors, Non-Residential Indians invested $13.1 billion in the Indian real estate market in FY 21. It further states that the investments are expected to reach $14.9 billion in FY22 and will grow at 12 percent.
Earlier, NRIs used to purchase properties with an aim to invest or use them for rental purposes. However, the pandemic came as a wake-up call for them and they have now realized the value of having a home in their homeland with a vision to settle in the future. Hence, property buying has become both a lucrative and sentimental solution for NRIs.
As per CII-Anarock’s Real Estate Vision study, 38 percent of the bookings of the Indian properties were done by NRIs last year and various factors have contributed to the surge in this trend. Be it increased transparency, eased investment norms, depreciation in the Indian rupee, a significant dip in property rates, or stringent regulations, all of these have paved the way for NRIs to invest in the Indian real estate market. The provision of attractive payment plans and the correction in the value of the Indian rupee has further given a boost to this trend.
NRIs now prefer spaces that are open, lush, spacious, and are in close proximity to the health and wellness amenities along with offering accessibility and safety. Additionally, they go for ready-to-move-in or on the verge of completed projects at the outskirts of the city so that there are no delays in possession.
Technology has also played a major role to bridge the gap between NRIs and domestic buyers. The developers are organizing virtual tours, a digital inspection of properties, processing documents, finalizing the paperwork, and purchasing the properties without making any physical visits by making use of the online space. Additionally, the construction of smart homes and the incorporation of eco-friendly features has also led to the increased attention of the NRIs in the Indian real estate segment.
The implementation of RERA has further escalated the sale of properties by NRIs. Since there are no delays in projects, developers can't divert funds from unannounced projects and are answerable for all the glitches, and hence RERA has emerged as a boon for NRIs. Additionally, the interest rates on home loans have been as low as 6.5% in certain banks and one can avail of a loan of up to 80% of the total property value. There are also options of using NER accounts when applying for loans to invest in Indian properties. All of these regulations have made the process of purchasing properties smooth and seamless for NRIs.
Summing Up
Experts also predict that demand for housing will increase amongst NRIs in 2021 due to remote working. While the GST and the pandemic brought several ups and downs but the Indian real estate sector has once again picked up the pace. Considering the present situation, the unforeseen future, technological advancements, and favorable regulations, it is indeed a feasible time for NRIs to invest in the Indian real estate market and their investment in domestic properties will keep on growing rapidly in the coming times as well.
The author, Nishit Jalan, is CEO at Grovy India. The views expressed are personal

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CompanyPriceChng%Chng
SBI Life Insura1,076.65 26.20 2.49
Bajaj Finserv13,525.05 323.85 2.45
Hindalco400.05 8.30 2.12
Divis Labs4,921.15 96.40 2.00
UltraTechCement7,616.70 126.40 1.69
CompanyPriceChng%Chng
Bajaj Finserv13,525.35 324.75 2.46
UltraTechCement7,605.05 116.10 1.55
Sun Pharma703.55 9.55 1.38
Titan Company1,722.55 21.90 1.29
Tata Steel1,298.10 16.20 1.26

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