If you were living abroad for several years, wouldn’t you want to have some tangible connection to your roots? What better way to do this than to buy a slice of land in the country of your origin? This is exactly what the non-resident Indian (NRI) is doing; more so, as a result of the present pandemic. Let’s explore the reasons for this phenomenon that is taking Indian real estate by storm
Property as a strong investment
Although there has been collective global upheaval in our lives, with lives and jobs lost, there have been slivers of hope too, predominantly in the spheres of healthcare and financial stability. People are taking a serious look at their health as well as looking for strong financial options – besides a contingency fund and jewellery – for the future. For those thousands who have lost their job, are buying apartments to earn rental income and stay afloat. This is where property as an investment is gaining traction among NRIs. According to statista data, the value of NRI investment in primary real estate in India in 2017 with an estimate for 2022. In 2022, the value of primary real estate investment by non-residents in India was estimated to amount to around 25.7 billion U.S. dollars.
Policy clarity buoys demand
India has clear rules defined for NRIs to make their property purchase a breeze. Under the Foreign Exchange Management Act, 1999 (FEMA), an NRI is someone who resides outside India for ‘employment, business or vocation in circumstances as would indicate an intention to stay outside India for an indefinite period. An individual will also be considered an NRI if her/his stay in India is less than 182 days during the preceding financial year. An NRI can buy land in India – except agricultural land - to construct a house, apartments or villas, and commercial property. However, if you are an NRI you cannot buy more than two residential properties in India. There are no such restrictions on commercial property and many an NRI is investing in offices and co-working spaces, warehouses, self-storage facilities, business and data centres, etc.
Rupee at a low
A major factor boosting NRIs in investing hugely in Indian real estate is the depreciating value of the Indian Rupee against the US Dollar. For the NRI earning in foreign currency, buying a property in Indian currency works out much cheaper and lucrative in the long run. So, whether they’re buying an apartment for their own use or to rent out, or going in for land to construct a house later or to sell it, property in India offers the best deals ever in present times. Additionally, there is still a demand for real estate in India, making it a lucrative investment option for NRIs.
Attractive home loan interest rates
In the last 15 years, home loan interest rates have not seen this kind of a low as it is presently. This is why NRIs under FEMA are availing home loans through Indian banks and home finance companies (HFCs) in droves. Banks such as State Bank of India, HDFC Bank, LIC Housing Finance Ltd., Kotak Mahindra Bank have dedicated departments to service NRIs looking for the best offers in housing loans. NRIs can avail a housing loan to purchase, construct, or renovate a new or existing house, or even a plot of land.
Supply of ready, bigger homes
Having lived the good life and residing in palatial villas abroad, NRIs desire the same luxurious lifestyle back home too. This is the primary reason there is more demand for larger luxury homes from this section of the population. Also, no longer do they want to wait for the construction of their future home. The uprooted NRI is opting for ready homes to move in to instantly. And then are those beautiful perks of luxury homes. “The new generation, especially the millennials, will choose homes that have a wellness quotient. Healthy and wellness facilities such as gyms and yoga studios, jogging tracks, sports arenas and playgrounds, have become the new trend among this lot of homebuyers. Several current large and premium projects are keeping up with these requirements and making the necessary additions too,” shares Manjusri Suuraj, General Manager, Sales & Marketing, HM Constructions
As the influx of the globally travelled NRI continues into India and Indian real estate, the sector is looking up to welcome this trend. With India fast becoming a global production hotspot, NRI real estate investments on the commercial front are on the upper trajectory indeed
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