– Santhosh Kumar, Vice Chairman, ANAROCK Group
The last few years have witnessed a huge fluctuation in the Indian rupee, which has been due to multiple reasons – from the COVID outbreak to the uncertainty in the global geopolitical landscape, interest rates, high inflation and much more.
If we go by the calendar year, data from January to June 2022, the search traffic from NRI customers witnessed a 117% jump from the same period in 2020. But is this a new trend that we are witnessing post COVID? Not really. I would say that real estate investment has always been a popular avenue for NRIs, and after a blip that occurred during the pandemic, we are now witnessing significant momentum, which I believe will continue for the next few years.
NRIs have traditionally parked their investment in high-end luxury properties back home that match their international lifestyle and generate sizeable rental income.
Indians today are present across the world, and they have always believed in real estate as the safest asset to invest in. In the last few years, we have been getting several enquiries from countries with a healthy Indian population such as UAE, UK, Singapore, Australia, and Saudi Arabia. Whether its for personal use or as an investment option, NRIs have been instrumental in contributing to the 7% GDP that has been attributed to Indian real estate.
The smart NRIs have been successfully leveraging technology to make more informed decisions through cutting-edge PropTech platforms that help in streamlining the entire journey… from discovery and research to final sale and documentation. Online launches, virtual property exhibitions and digital transactions are bridging the gap between real estate developers and expat buyers.
So, what do they really look for before investing?
From getting market insights, to getting regional pricing trends, current project status, developer history, reputation, public reviews, RERA certification status, and a lot more that goes into the initial research phase.
NRI’s usually choose reliable and transparent developers and prefer their home state or city. However, in recent times, their focus has shifted to affordable and mid-segment housing for higher rental yield and better long-term appreciation. The implementation of RERA has proved to be the catalyst in influencing the buying decision for NRIs and given them the confidence in projects registered with RERA.
Which cities are most commonly searched?
Metros are preferred – Mumbai, Delhi-NCR, Bengaluru, Chennai, and Hyderabad are the favourites. The inclination is to invest in larger properties which are more spacious, and they are willing to pay a premium for the comfort and amenities.
Recently, we have also witnessed a new trend which was completely ignored earlier – from a long-term investment purpose, today Tier 2 cities have become a prime focus, especially Lucknow, Nagpur, Pune, Ahmedabad, Kochi, and Jaipur. These are truly emerging as the most value-for-money urban destinations.
Second Homes or Holiday Homes is another trend that we are witnessing where NRIs have been exploring hilly areas as well as beaches and other mesmerizing locations.
Legal & Finance are set
Another reason why NRIs prefer to invest in Indian real estate is because the banking regulations are favourable towards them. Loans are easily available with seamless EMI payments through international remittances, with a simplified tax regime and no legal hassles.
India is a resurgent economy, and the real estate sector will continue to flourish and spark off significant numbers.
Purposes may vary, but the increased investment of NRIs in the real estate market, has extended the consumer market pool for developers and also encouraged them to level up their projects to meet the global standards of living.
The NRI community must keep investing to reap the benefits in the long-term, and to usher in a new era of Indian real estate.