Reasons why NRIs are investing in India’s real estate



The Indian real estate sector has largely grown over the last decade and the NRIs involved in this has also led to its growth. The NRIs have largely felt the need to get involved in Indian real estate and buy a home in India because of the need to return to their home country and thereby improve their quality of life. Since time immemorial, the real estate industry has faced a significant change, especially in the post-pandemic period.

The Indian real estate industry has shown to be extremely profitable for Non-Resident Indians and it has led to an increase in the profit margins and would help in extending the reach of their investment portfolios. NRIs in the US, Canada, the Middle East, Europe, and other Asian countries prefer investing in cities such as Gurgaon, Bengaluru, and 
Hyderabad. Two-tiered cities have also shown an increase in the interest rates from NRIs who would prefer buying homes in their hometowns. The dynamics of Indian families were altered due to the pandemic. It has strengthened the extended family system and due to this, many preferred to live with their grandparents and parents, in fact with their entire family. Work-from-home (WFH) or work-from-a-remote setup has become a trend in the post-pandemic period and this has increased the demand for larger homes in their hometowns. Professionals are looking forward to building additional spaces in their homes to set up a Work-From-Home office.

The depreciation of the Indian rupee has also pushed up the demand for properties because the NRIs look forward to investing in real estate. Since the beginning of 2022, the rupee has depreciated significantly. The Indian rupee faced lots of pressure due to an increase in the trade deficit and the rise in crude oil prices, but it was also affected by an increase in the interest rates in the US and the rising fear over a global economic slowdown. NRIs benefited from the rupee depreciation, especially those who stay in countries with a stronger currency value. They are at an advantage as after converting their funds to their home country’s currency, they can buy a property that is much cheaper in India than what it would have costed if they were living in their country.

Real estate developers are catering to this new rise in demand for homes from NRIs by launching properties that meet the recent standards and are provided with better amenities. Recent trends show that NRIs are looking forward to spacious, smart, modern living spaces with an efficient storage system that supports the ‘new normal’ lifestyle in the post-pandemic period in terms of flexibility or energy conservation. There is a new preference for gated communities that are well-connected and self-sufficient and consist of open spaces that are close to the city. These communities offer a better quality of life, as they have all the amenities that NRIs prefer for example schools, hospitals, sports facilities, shopping malls, and so on.

The government has also started investing in infrastructure which has again led to improvement in the connectivity system and this has helped in the rise of two-tiered cities. Tier-one cities are the cities that are the most connected, while tier-two and tier-three cities are the less connected cities. The rapid infrastructure growth in tier-two cities has led to growth in connectivity, and more businesses have developed in these locations. Both physical, as well as digital infrastructure, has shown these trends. NRIs are also looking for second homes as a means of investment that would yield good returns. Weekend homes were viewed as a luxury and a purchase of taste but in recent times, they are viewed as private and secure places.

Government reforms such as RERA Act (Real estate regulatory authority) have provided power to the hands of the NRIs. Rera has increased transparency and this has increased the confidence of the common and NRI buyers. Indians involved in the real estate industry face many challenges. Due to the lack of transparency, there was a lack of trust among buyers and sellers. Rera has made it easy for people to buy or sell properties without any hassle or fear of being cheated because all information related to a property can be found on this portal. This has increased transparency which means that there are no costs that are hidden and are involved in the transaction and this has increased confidence among both buyers and sellers leading to claiming of better prices for properties and involving a higher volume in sales.

The Indian real estate sector has undergone a drastic shift from opaque and confusing transactions to efficient and transparent ones. The development of technology has assisted the NRIs in the real estate sectors in undergoing a full-fledged transaction. India’s real estate, improved transparency levels, depreciation of rupees, and stronger real estate laws are driving the demand lines of the NRIs. This trend shall even continue in the future with the ever-growing demand for comfortable and luxurious homes in the real estate sector.

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Dr. Kirti Sisodhia

Content Writer

CATEGORIES Business Agriculture Technology Environment Health Education

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