NRIs have an advantage in the property market of India post-demonetization as real estate developers in major cities of the country have “significantly” dropped property rates, according to Singapore-based business analysts.
Non-Resident Indians have always been important and active investors in Indian Real Estate. As they have the advantage of exposure to global standards of real estate, their role in bringing financial and technological best practices to India is indispensable. The year 2017 has acclaimed a positive shift in Indian real estate already with lowered interest rates and the announcement of new credit linked subsidy scheme, thus turning real estate as more accessible to its investors. Regulatory updates like RERA and GST are also inducing positivity in the market to a great extent. But the biggest news is coming from the affordable housing space which has now been designated with ‘infrastructure’ status. The NRIs have expressed their interest and have given ‘thumbs up’.
In this story of rebound, NRIs have taken a strong lead as active buyers of Indian property. The NRI populace at 30 million is almost equal to the entire population of Canada. In 2016, the influence of NRI buyers was clearly observed with rising incomes and improving the economy. By the end of 2016, the total investment in a primary real estate in key Indian markets reached $9.6 Billion. Further, 20 percent of the NRI investments are made by Non-Residents settled in the UAE. Indians settled in the United States, Canada and Australia also hold significant investments in Indian property markets.
As the demographic focused on younger participants, demand for properties in small unit sizes further rose. 2016 is also remembered for some major initiatives by the central government. The Benami Transaction Act, RERA (Real Estate (Regulation and Development) Act, 2016) and demonetization were some of the major steps taken by the government to bring in transparency in real estate transactions. It brought stability and restricted non-serious investors.
Not just the Government intervention, even the decline in the worth of the Indian Rupee has encouraged the NRI Community to invest in the real estate segment of India. Various digital mediums have also created an unprecedented awareness among property investors today. An online tool like project comparisons carries the ease of comparing different projects on different parameters thus proposing the best one as per the requirement of an investor.
There have been investments worth USD 6 Billion in the year 2014 with the subsequent expectations that this figure will get double by 2017 accumulating 20 % of the entire market shares. However, the experts believe that this figure can show a massive growth if the market has a positive approach towards the realty sector.
Digitalization is effectively bridging the geographical gap as most of the information regarding real estate is available on the click of a button. So, NRIs are not required to present physically to crack any property deal and can accumulate the best information regarding any property they are seeking in India from their country of residence.
As the new financial year marks its presence, Indian Real Estate with the Indian Diasporas at the forefront is poised for accelerated growth.