Non Resident Indians apart from maintaining some tangible connection to their roots through an investment in property in India, now have even more reasons to buy Indian real estate. The biggest shift happened during the pandemic, when concerns of healthcare and monetary stability led to overseas Indians consider India as a place of refuge – both for health and financial wellbeing.
The steady decline in the strength of the Rupee against the US dollar, while disastrous for import dependant industries in India turned out be a sliver of hope for real estate sector. NRIs lapped up the opportunity to buy real estate in India taking advantage of the falling value of the Rupee and getting the assets at the most discounted rates. Luxury homes and integrated townships have received a major boost on account of NRI investment.
YEAR 2022 OF NRI INVESTMENTS
NRIs living in countries with a stronger currency value against the INR, taking advantage of the their money multiplying after conversion are investing in luxury home segment that not only yield a higher rate of appreciation, but also better rentals.
Vikas Wadhawan, Group CFO, Housing.com & PropTiger.com summarizing the year 2022 for the industry in terms of NRI investments said, “With the strengthening of their purchasing powers coupled with a generic demand drive during the year, NRI investment in Indian residential real estate have shown significant upwards movement. Due to this trend, the share of premium properties in the country in overall sales numbers increased across quarters. Buoyed by this trend, developers are also now focusing on launching premium projects, keeping in mind the specific requirements of this buyer segment.
Anupam Rastogi, Co-founder and CBO, NRI Sales, Square Yards shared, “2022 was an acceleration year for the real estate industry as homeownership sentiments witnessed a tremendous surge from the NRI community. NRIs were increasingly confident about the Indian markets as they looked more resilient and stable in spite of the war-induced global turmoil. NRIs lapped up bigger homes as devaluation of the rupee gave them a higher buying power, despite the hardening home loan rates. In a nutshell, the real estate industry altogether got the pace that it acutely needed.”
PARADIGM SHIFTS IN NRI INVESTING IN INDIAN REALTY
Mumbai and the Gurugram have been the top real estate markets attracting most investments from NRIs. They are investing in the luxury homes, resort-hotels, office spaces, premiere township apartments and commercial real estate.
Anupam Rastogi said, “Most NRIs returning home due to work-from-home arrangements are looking for larger apartments like condominium apartments and bungalows in 3–4-bedroom configurations to suffice their home office needs. They also want their homes to be equipped with smart home features including touchless controls and air purification systems. Sprawling green spaces with jogging tracks, yoga and sauna facilities and well-equipped gymnasiums are some amenities that figure on every NRI’s list now.”
“NRIs buyers continue to fuel demand for premium housing with their increased willingness to pay for the best-in-class facilities they demand in a property. Even as some of the strongest housing markets across the world show signs of a meltdown, Indian realty shows resilience grown reflected in key performance benchmarks. Home purchase decisions by NRIs are now largely shaped by the coronavirus pandemic-caused behavioural and perception change. So aside from wealth generation, they are also viewing it as a means of long-term physical security,” added Vikas Wadhawan.
According to the property consultants, NRI investors eyeing property in India will need to make timely moves if they want to cash in on the opportunity to turn their funds into lucrative investments. As per Vikas Wadhawan, for NRI buyers, it is a lot cheaper now to afford world-class residential structures with great investment potential. “The depreciation in rupee, greater availability of ultra-premium housing projects by branded developers, ease of home purchase were some of the biggest demand drivers in 2022. Further ease of doing business will make Indian realty unbeatable in terms of foreign investments.”
“With rating agencies forecasting highest growth for India across the world, both metropolitan cities and smaller towns will attract more investments from wealthy NRIs into India’s residential market. Moreover, NRIs have noticed the change in real estate functioning post-RERA, regulations around stamp duty and GST payments, leading to creation of a safe investment scenario for them,’ stated Anupam Rastogi.