Residential real estate in India has seen a noteworthy surge in non-resident Indian (NRI) investments, with a robust 35 percent year-on-year increase, according to Saurabh Garg, Co-founder and Chief Business Officer of NoBroker.
While this trend is not entirely new, the recent upsurge in demand is substantial when compared to the period before the Covid-19 pandemic when NRI investments remained in single-digit figures.
Industry estimates indicate that the Indian housing market registers transactions worth approximately ₹4,00,000 crore annually. Out of this, nearly ₹50,000 crore, constituting 15-20 percent, comes from NRI contributions for primary units. When considering both primary and resale units, the total sales amount to ₹9,00,000 crore, with NRI contributions accounting for nearly ₹1,50,000 crore.
Several factors contribute to this heightened demand among NRIs, including their interest in the potential for high returns and the stability of the Indian real estate market, which offers more consistent returns compared to alternatives such as stocks and cryptocurrency.
In the realm of premium properties, investors are increasingly favoring gated communities and land investments. A survey conducted by a prominent prop-tech firm revealed that 98 percent of the demand is directed towards gated communities due to their extensive amenities and rental convenience. Furthermore, approximately 25-30 percent of the demand is driven by investors seeking favorable returns, while the remaining portion is for self-use, with a notable preference for 4 BHK units.
Key markets identified by industry experts include Chennai, Pune, and Bengaluru, which have experienced a significant influx of investments, resulting in an 18 percent increase in premium and luxury property investments. Among these markets, Chennai stands out as the most attractive destination for NRIs interested in premium properties.
Significantly, a major chunk of the demand has emanated from the GCC region, followed by Singapore, the United States, and Australia.
The transformation in the NRI outlook towards Indian real estate can be attributed to the improved ease of property management. Saurabh Garg noted that one of the significant challenges faced by NRIs in the past was effectively managing their properties in India. However, contemporary real estate portals now offer comprehensive property management services, encompassing property selection and tenant management. This reduces NRI investors’ reliance on relatives and brokers, making them more optimistic about investing in the Indian real estate market.
Also read: Indian Property Market Witnesses 15% Jump in NRI Investments Amid Depreciating Rupee