NRI Investment In Indian real estate market

After several favorable policies introduced by the regulatory agencies to encourage the NRIs to invest in real estate in India, the NRI investment witnessed a sudden climb in recent years. According to a report by 360 realtors, the NRIs have invested nearly $13.3 billion in the Indian real estate market in FY-21, which higher than the earlier estimate of $13.1 billion. Despite a significant hit due to the pandemic, the investment volume went up by 6.4% compared to the previous fiscal. 

In its First quarter, the number diminished by 35 percent due to the global pandemic, followed by the lockdown imposed worldwide. An extreme slowdown in the economy and other business activities adversely affected the NRI investment sentiments as well. However, the ball game improved in the Second quarter as innumerable offers exclusively for NRIs and attractive payment options started enticing NRI buyers. 

NRI Investment In Indian real estate market
source: mldllifespacebucket01

The reports reveal that numerous factors are playing a significant role in the uptrend. Apart from the favorable policies and attractive payment plans, correction in the value of the Indian currency is also playing a crucial role and giving a buying boost. After regression analysis, the report by 360 realtors has further suggested that the investments are likely to rise to $14.9 billion in FY22, growing by 12 percent. 

Also Read: How Foreigners and NRI’s Can Buy Property In India?

How NRI Investment Revived Soon, Despite the Initial Setback  

As per 360 Realtors’ report by the end of the 2nd quarter, the investment from Non-Resident Indians grew by 18 percent on a year-over-year basis. 

Another factor that led to increased growth is reducing the stamp duty and circle rate in states like Karnataka, Maharashtra, and Delhi. 

The Gulf Cooperation Council (GCC) – A significant source market

The report shows that GCC remains the primary source of NRI investments in India. GCC alone contributes nearly 41% of the total investment. Whereas investment contributions from the expat community residing in the USA consist of 17% of the entire purchase, Singapore comprises 12% investment. Other sources include UK, South Africa, Canada, Kenya, among others.

Incremental growth in Ticket Size

The NRI report set out by 360 Realtors shows that earlier there was a dip in the average ticket size, but most homebuyers are now picking out the more prominent spaces after the pandemic. In FY21, an average ticket size from the USA has touched approximately $124,000 compared to $111,000 in FY20. Similarly, the ticket size from NRIs based in UAE inched up to $97,000.

The Impetus Will Continue To Grow

The reports suggest that the investments from Non-Resident Indians will continue to rise in the coming quarters as well. Given the ongoing crisis and challenges the real estate industry faces due to the global pandemic, digital is a significant game-changer. Both the realtors and brokers have realized the significance of adopting digital technology across the value chain.

Now, the digital technology virtual property tour, 3D viewing of properties, AR & VR technology, and online transactions, which were just a topic of boardroom discussions for a long time, have finally started coming into real-world application. This will paint a positive and progressive image of the real estate sector in India and give a significant push to NRI buyers to invest in their homeland.

The advent of digital technology is playing a major role in bridging the gap. It is helping the NRI buyers to watch and learn more about the various property options available in the market without physically visiting the property site. With all the facilities and other required information, just a click away makes it even easier to make an informed decision. 

Also Read: Know Why NRI Buyers are attracted to invest in Indian Real Estate

Also Read: NRIs: Things to consider while Purchasing Home in Bengaluru