More than ever before, Indians are now eyeing properties in Dubai. Investing in real estate has emerged as the quickest way to get a residency permit in UAE, and since 2017, Indians have ranked amongst the top 3 nationalities investing in property in Dubai.
Historically, the major demand driver for NRIs investing in Indian real estate was their eventual inevitable return to India. The general sentiment of a post-COVID-19 reverse exodus to India has thrown this driver into sharper relief.
Many NRIs settled in Europe, America and the Middle East who have bought real estate in India are considering refinancing their home loans.
Real estate is clearly a superior option for NRI investors. For NRIs, opportunities back home are even more appealing with the fall of the Indian rupee.
Indian residential real estate is a long-time favourite of resident Indians and NRIs, and recent trends suggest a positive outlook for this asset class going forward.
The National Housing Board (NHB) directive to HFCs is actually very good news for NRIs keen on buying a property back home in India.
Research by ANAROCK Property Consultants shows that the unsold inventory of luxury homes declined by 12% in Q1 2019 from 48,300 units in Q1 2018.
If we compare commercial real estate yields to those for residential properties, it becomes evident why many HNI NRIs prefer investing in the former.
Shajai Jacob, CEO – GCC (Middle East) – ANAROCK Property Consultants
- NRI investments into Indian real estate are led Indian expatriates from UAE, USA, UK, and Canada
- Bengaluru, Mumbai, Pune, Hyderabad, Chennai and Delhi-NCR currently attract the lion’s share of NRI investments
- Equities score higher than real estate on capital appreciation, but residential property comes with the benefit of rental yield, relatively lower risk and considerable tax benefits
Riding on a wave of economic reforms, improving transparency and better governance, foreign investments in Indian real estate are set to scale new heights.
With laws now allowing 100% FDI (foreign direct investment) in construction development and REITs now in place for commercial real estate, the Indian real estate industry will see increasing investment infusions from NRIs (non-resident Indians).
According to a World Bank report, India received USD 79 billion in remittances in 2018 – with a sizeable portion going into real estate.
NRI investments into Indian real estate are led Indian expatriates from UAE, USA, UK, and Canada. In terms of Indian cities,
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Shajai Jacob, CEO – GCC, ANAROCK Property Consultants
- Regulations for property acquisitions by NRIs
- Returns on investment in different real estate asset classes
- Documentation, home loans, tax implications compliances
- Best cities and micro-markets in which to invest
Whether the real estate market remains bullish or bearish, NRIs prefer a place back in India – not just for investment returns but also to remain rooted in their country of origin.
Previously, NRIs (like most other buyers and investors) had every reason to be leery of the Indian real estate market. Today, game-changing policies like RERA and GST have now boosted confidence and transparency and streamlined the property-buying process for NRIs.
This has begun fuelling new NRI investments into the Indian property market. The fact that the rupee value against dollar depreciated in 2018 was also a sound reason for NRIs to view Indian real estate more favourably.
And, of course, developers have been offering substantial freebies and even discounts, apart from interesting payment plans, to draw NRIs as well as domestic buyers to their projects.
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