Anuj Puri, Chairman – ANAROCK Property Consultants

When it comes to Indian real estate, the topic of NRI investments is pretty much an evergreen one. The fact that Indian developers had, in the past, launched and marketed projects with an almost exclusive eye on NRI customers is certainly no secret.

There were many reasons for this, but the primary one was that NRIs – especially NRIs based in the Gulf and the US – were seen as cash cows with more money than sense.

Time has proved this theory erroneous. NRIs are among the savviest property investors on the Indian market today. This is amply demonstrated by how adroitly they have gauged the new investment trends on the Indian real estate market.

For a long time, the returns on investments that NRIs could get on residential assets were extremely rewarding, considering the significant capital appreciation whilst the rental yields have always been low.

However, during the last couple of years, the market slowdown resulted in capital appreciation on residential assets no longer being as per NRI investors’ expectations.

In the current market conditions,

Anuj Puri, Chairman – ANAROCK Property Consultants

The Indian real estate sector evokes a lot of interest from NRI investors.

This interest is driven by long-term fundamentals such as emotional connect, safeguarding retirement plans, better returns and yield on investments, and depreciation in the rupee’s value.

While there are around 30 million NRIs across different countries, investment into Indian real estate is led by NRIs from UAE, USA and Saudi Arabia.

From 2000 to 2014, NRI investments in Indian real estate reached substantial levels ranging between 10-18% annually. However, when the residential market began to slow down in 2015, the NRI investment fervour into this asset class began to cool off a bit.

To top it off, there was a slew of reforms and policy changes such as demonetization, RERA and GST, the combined effect of these being a decrease in NRIs’ investment in the sector.

The highest impact was in the residential real estate market – which, for a long time, was the primary focus of NRI investors with their interest skewing towards apartments and villas, followed by plots and other property typologies.