India is one of the fastest-growing economies in the world. It welcomes foreign investments in large numbers. The investments and continual demand for housing solutions have resulted in the boom the real estate sector is celebrating today. Buyers have become more active, and interestingly, there’s a rising demand from non-resident Indians (NRIs). The scenario is such that most realtors rely on NRI investments in India.
NRIs from developed countries like the USA, UK, UAE, and Canada are leading investors in the Indian real estate market. The country’s skyrocketing financial market has further encouraged Indians abroad to view their home country as an option for settling down in the future.
NRIs are buying property in India for a variety of reasons, including a source of income, an investment, or a retirement nest. Many also believe owning property in the country means having an emotional connection with their homeland. Another reason driving NRIs to buy real estate in India is the risk of a job loss or their visa expiry.
What Attracts NRIs to the Indian Real Estate Market?
The Indian government has introduced several benefits for NRIs investing in property in India. NRIs can invest in all types of land except agricultural lands. The reasons NRIs are eyeing the real estate market in India are:
1. More purchasing powers
NRIs tend to have better purchasing power compared to their Indian counterparts. It is because of the depreciation in the rupee’s exchange rate against the dollar and other currencies. Over the years, NRIs have also shown a keen interest in luxury homes, especially in metro cities, be it for investment or for their families.
They are also investing in property in their hometowns, mainly for the purpose of creating additional residential space for their families. Their preference is for plotted developments, causing many developers to enter the space.
2. Plenty of investment avenues
A few years ago, NRI investments in India were mostly limited to metro cities. But many could not invest due to the sky-high rates. Today, the real estate sector has undergone rapid development, and luxury residential real estate has also become a point of interest for NRIs.
Consequently, there is a significant increase in NRI investment options in India in smaller towns and cities as well, making it easier for investors to find the perfect investment choice at fair pricing.
3. Mode of additional income
Many NRIs have shown a preference for vacation homes or investments in resorts. A resort suite ownership plan includes resort units situated in a large resort complex at popular vacation destinations. Home buyers can use the unit for themselves when they desire. Alternatively, they can include it in the resort’s inventory, allowing it to rent the property to guests.
The investment model lets NRIs earn a monthly rental, which eventually pays for the purchase of the resort unit. Another aspect attracting NRIs to invest in a resort unit is that there is no need to maintain the property as the onus is on the resort’s management.
4. Secured yields
NRIs prefer real estate over other asset classes, like equity and gold, due to the strength of this asset class during global political and economic turmoil. Gold is a global commodity, and its price has risen in value against other instruments.
As the world dealt with war and global recession, the equity market faced many volatile fluctuations. But NRI investment in Indian real estate has remained a safe option, capable of yielding good returns over a long period.
5. Increased transparency
Advancements in technology help investors pick the best investment for NRIs in India. Real estate developers use proptech to let NRIs view homes using Virtual Reality and Augmented Reality. NRIs can look at any property from the comfort of their homes.
To cater to the needs of the NRI buyers, builders are organizing online launches using video conferencing. The sector also conducts webinars to inform prospective homebuyers about their upcoming launches.
6. Relaxed investment laws for NRIs
To facilitate NRI investment in India’s real estate, RBI has eased investment laws. India now has a much faster property-buying process. The need for paperwork is also lesser as most processes can be carried out and documented online. It is not mandatory to obtain permission from RBI before investing in a property, but one can do so if one wants to.
Many NRIs from different parts of the world are investing in the Indian real estate market. While NRIs from the Gulf region contribute to almost half of the country’s total foreign investments, NRIs from Singapore, Germany, the US, Canada, Kenya, and South Africa have also keenly invested in the real estate sector. This is because the investment is safe, yields return, does not require following a tedious process, and creates a source of additional income.
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