The recent appreciation of the US Dollar (USD) against the Indian National Rupee (INR) has made India a preferred destination for residential and commercial real estate investments.
Experiences from the pandemic and the current economic trajectory have made expatriates consider investments in their homeland.
Reports reveal that enquires from GCC for assets in price brackets across premium and luxury categories have risen exponentially. The trend also underlines the expatriates’ interest to be close to their families, while some are investing with the purpose of having a base back home, should they decide to retire in India.
Industry data suggests that NRIs invested over $13.1 billion in the Indian real estate market last year and will grow by 12 percent in the current fiscal. Further, home sales in India for the first quarter of 2022 have already spiked to the highest level since 2015.
These positive trajectories are only augmenting more pull from NRIs who are keen on high-end investments, across metros, and countryside locales.
“Indian real estate has always been a market of enormous opportunities for NRI investors from GCC countries. As the Indian rupee hits record lows against the dollar, there are all sorts of knock-on effects and buying real estate in India is now relatively accessible for NRIs earning abroad and keen to take advantage of those high returns, as a result, we are seeing a higher level of inquiries. This is particularly true for residential real estate because, factually, the residential asset class has given always high appreciation and it has been a safer investment option, being a lot more mature in terms of coverage in different cities in India and flexibility in offering options for just about every budget.”
It is expected that NRI investments in Indian real estate will rise by 12 percent this year with continuous developmental activity and resurgent economic momentum.
In fact, the trend has created a specific market segment for high-rise properties and integrated townships across metros, as well as large holiday homes in the countryside and coastal areas.
Locations such as Shimla, Kasauli, Mussoorie, Goa, and metro regions such as NCR, Pune, Kochi, and others are generating a lot of interest. Luxury interiors, and amenities, with a focus on the environment and wellness, are often requisites by NRIs while shortlisting real estate options.
“In current times when property prices are higher and the rupee is lower, from the NRI perspective the opportunity for arbitrage is significant. Factors like a simplified taxation regime and indexation benefit for properties held in India encourage NRI buyers to park their surplus money in India. Other major decision drivers are factors like lower home loan interest, digitization of procedures, and transparent regulations,” Mr. Ohri further added.
Reports indicate that enquires from GCC countries (UAE, Oman, Kuwait, Saudi Arabia and Qatar) are the highest when compared to other Asian regions.
GCC constitutes almost half the Indian NRI and Expatriate population in the world at around 7.5 million. Given the location proximity, favorable policy outlook, current exchange rates and indexation benefits, India is and will continue to be a hotspot for ‘back home’ demand, bringing in more FDI and circulating a positive sentiment for the domestic sector.