Indian Real Estate

News: As the Indian real estate sector, which was hit hard by the global pandemic, is trying to revive, courtesy new policies and low-interest rates, amongst all this, a particular segment that is showing interest in Indian real estate investment is NRIs. The primary contribution is coming in from those settled abroad for properties across various segments: residential as well as commercial.

With uncertainty looming almost everywhere, people living overseas continue the practice of investing in real estate in their homeland, and it has been bridled with uncertainty in the past few months. In a recent statement, Prashant Thakur, Director & Head of Anarock Property Consultants, said, “The Covid- 19 pandemic has increased NRIs emotional association of long-term security with physical assets.

As many as 63 percent of respondents NRI respondents of the survey state this as their primary reason for buying homes in India. The other reason includes the uncertainties posed by Covid-19, and they feel that investment in the Indian real estate is the most sensible decision considering these volatile times.”  

As per Anarock’s consumer survey, nearly 73 percent of NRIs now prefer properties priced between Rs 90 lakh to Rs 2.5 crore, and the cities in high demand are IT hubs of Bengaluru and Pune. These two cities saw approximately 48,370 homes sold in 2020 in its luxury segment. As per the survey, nearly 16 percent prefer the NCR market, and 14 percent prefer the MMR region, with a major chunk eyeing the luxury segment. Luxury properties are emerging as a hot favorite among NRIs because of the current situation; lucrative deals from developers coupled with factors like lower interest rates and the weaker rupee have made home-buying a remunerative option for NRIs. 

Top Factors NRIs consider for Investing in Indian Real Estate

If we look at the main criteria NRIs consider before inking a deal, are tax benefits, ready-to-move-in properties, and developer’s records. Additional factors include:

  • The foreign investment regulations.
  • Mode of payment.
  • The property’s nature (NRIs/OCIs are not allowed to own agricultural or plantation land).

Typically, the investor group consists of two age groups: 35 – 45 years, who usually invest in Indian Real Estate for their parents, and the other group is between 55 – 70 years, who invest for their retirement purpose.

Why NRIs Are Eyeing On Bengaluru and Pune 

Indian Real Estate
source: thehindu

According to a survey by Anarock, the cities have received a major chunk of overseas investment for several reasons. With a majority of funds coming into the two cities – Bengaluru and Pune. Job opportunities in the IT sector doubled up with the rise of healthcare and manufacturing facilities, which are also the two biggest draws and favorable investment parameters. 

As per the survey, the majority of the NRIs are looking for read-to-move-in properties. Concluding the overall survey report, nearly 29 percent preferred ready-to-move-in, while only 27 percent preferred under-construction properties, which they’re expecting to be delivered within a year. Out of all the respondents, around 24 percent who already booked properties in the last six months, nearly 38 percent respondents were NRIs who wanted to make the most of the prevailing market condition hit by the pandemic in India, which has come with lucrative deals, cut in the circle rate, and low home loan interest rate, the survey showed.

The majority of the survey respondent (86 percent) of the polled NRIs only consider properties by reputed realtors who have a good project completion, timely delivery of the project, and lowest risk factor. As many as 68 percent of NRI respondents who participated in the Anarock survey considered real estate as the biggest investment arena considering the current situation. Talking about their perspective on the residential segment prices, about 44 percent of the survey respondents responded that the prices would remain stable this year. In comparison, the 27 percent feel it is likely to increase during the year.