Be it the citizens or the people around the globe, the real estate market of India has remained a promising market. Moreover, the interest of Non-Resident Indians (NRIs) in the market has helped this sector to flourish more. There are plenty of reasons why these NRIs are keen on investing and parking their money in Indian real estate.
According to the real estate market experts, the lucrative investment choices with simplified taxation are the biggest advantage that the NRIs can get by investing in Indian real estate. In this piece, read why the NRIs, especially Gulf countries-based NRIs, are eyeing India’s remunerative real estate market.
Table of contents
Why do NRIs Want to Invest in Real Estate in India?
The reasons why NRIs want to invest in the real estate market of India are as follows:
- The major reason is the falling value of the rupee (₹) against the dollar ($). As the hard-earned money of NRIs is converted into Indian currency, the value increases, making real estate in India an affordable choice. The decreasing value of the Indian currency has increased the purchasing manifold of the investors.
- India has one of the best booming real estate markets in the world. After the pandemic, the sector was resurgent, and the pent-up demand due to the infection started rising. This is helping Indian real estate grow leaps and bounds, leading to the sector’s booming.
- The real estate industry continues to be a profitable investment choice for the NRI population. The NRI investors are encouraged to engage in real estate in Tier II and Tier III cities due to expected growth in these areas. Smaller cities will drive expansion, and the prospect of substantial long-term profits will maintain investors’ interest.
- India, being one of the first countries to get foreign currency from other countries, simplified taxation authorities also encouraged the NRIs to invest their hard-earned money in India. For properties owned in India, NRIs also receive an indexation advantage. For instance, real estate owned for more than 24 months is considered a long-term financial asset and receives an indexation advantage with a simplified tax rate of 20%. Sections 80C and 80TTA of the Income-Tax Act of India also permit some tax deductions.
see also – 5 Reasons Why You Should Invest In Real Estate at a Young Age
GCC-Based NRIs Getting Attracted Towards the Lucrative Indian Real Estate
The Indian real estate market has seen a surge in information being asked by the GCC-based NRIs in the previous quarter of 2022. NRIs, especially those belonging to the Gulf Cooperation Council (GCC), are interested in investing in the lucrative Indian real estate world. They are interested in investing in residential and commercial properties in a wide range of price brackets. As per the information of 360 realtors, the investments made by foreign countries in the Indian real estate world was$13.1 billion from across the globe. A surge of 12% is expected to be seen in the investments made by people worldwide in 2022.
According to the Indian Government’s report, out of 13.46 million NRIs outside the country, more than half are situated in Gulf countries. The Gulf countries like Saudi Arabia, Kuwait, and UAE account for around 2.6 million NRIs, 1.03 million NRIs, and 3.41 million NRIs, respectively. Also, Oman is home to 7,79,351 Indian NRIs, and Qatar is home to 7,45,775 Indian NRIs.
In the last few years, the Indian real estate market has seen a huge increase in demand for ready-to-move-in spaces across all the real estate sectors. The demand for such units incorporated all demand for luxurious, midsegment, and affordable housing. As per the current research of Anarock, in the first quarter of 2022, the dealing sales saw a dealing of 99,550 spaces in the country’s top seven cities, where the NRIs purchase rate was as high as 15%.
The research by Anarock also mentions a major percentage of NRIs (about 82%) prefers buying premium or luxurious housing units in India. This is a major change in the purchasing decisions since the GCC-based NRIs only invested in low-cost or affordable housing units.
