Non-Resident Indians (NRIs) have always shown interest in the real estate market in India. Be it investing their savings or owning a property in their motherland to settle after retirement or just a status symbol, Indian real estate has been one of the top choices of NRIs when it comes to big investment.
Earlier, NRIs used to invest mostly in residential properties. However, the trend is slowly shifting. Due to the recent dip in the return on investment from residential projects owing to sluggish real estate market over the past few years, more and more NRIs are considering commercial properties for investment.
Here is why this is the best time for NRIs to invest in the commercial real estate in India:
- RBI Regulations:
To promote the flow of foreign capital to India, the Reserve Bank has reportedly eased some regulations on investments made by non-residents. RBI has revised the Regulations on foreign investment in India and has repealed and replaced the earlier regulations with relaxed ones. Read the RBI regulation here.
- Lesser Risk:
Post demonetization, RERA and later GST, accountability and transparency has increased considerably in the real estate market. Owing to RERA, investment into commercial as well as the residential property has comparatively become safer and the risks previously attached to such purchases have been moderated.
- Heavy Discounts:
To attract NRIs, many developers are offering several benefits, low residential prices and incentives in the form of discounts. Several developers are also offering good prices for luxury and commercial properties to clear the under-construction inventories.
- Investment Prospects:
It is a great time for NRIs to invest in the residential real estate as there has been a significant drop in property rates after demonetization. Investing in commercial properties offer a longer lease period and assure a steady income.
There has been a significant demand in commercial hubs across the country. In fact, while the residential sector is facing the challenge of high inventory pile-up, commercial office spaces have almost halved with cities like Bengaluru and Pune witnessing vacancy of single-digits. The launch of Real Estate Investment Trusts (REITs) is expected to further attract investment in office properties.