The Indian real estate market has been attracting Non-Resident Indians (NRIs) from the Gulf Cooperation Council (GCC) nations, particularly the UAE. NRIs from the Gulf countries have traditionally preferred investing in metro areas like the Delhi-NCR region and cities like Chennai and Mumbai; but, more lately, they have begun to focus on developing smart places like Goa, Ahmedabad, Chandigarh, Kochi and Panchkula. Several factors have contributed to this shift in preference, making Indian real estate a preferred investment destination for NRIs in GCC.
The creation of incredibly engaging online digital tours and virtual site inspections is one of the key factors fueling this rise. As a result, NRI investors may now inspect homes in India without travelling there in person, making it simpler and more comfortable to invest in real estate in India.
Another contributing factor is the government’s favourable incentives for NRI investment. The 2022-2023 budget was highly NRI friendly such as the reduction of a huge 25% on both long-term and short-term capital gains going down to 15% from 37% in the maximum surcharge. These incentives have encouraged more NRIs in GCC countries to park their surplus money in India.
The market of the real estate sector in India is gradually regaining its pre-pandemic magnitude despite the currency depreciation, pandemic response, and growing global prices. NRI investors have taken advantage of the rupee’s decline relative to the dirham, the US dollar, and most other major currencies to invest in India’s real estate market and purchase residences while earning substantial profits. NRI real estate investment grew in FY21 compared to FY20 by more than 6.4% (approximately 13.4 billion dollars) even after the pandemic.
Additionally, many NRIs are investing in real estate if they plan to come back and retire here in India, demonstrating the growing trend of individuals moving closer to home and returning to their country. Property sales in India rose to a level in the first quarter, not experienced since 2015. These optimistic trends have led to an increase in non-resident Indians from GCC nations drawn to high-risk ventures in large and small cities.
In addition to high-rise condominiums in major cities, the trend has spawned fresh luxury holiday residences in non-metropolitan and seaside areas. The current market presents a considerable event for arbitrage from the standpoint of an NRI because the prices of properties are higher, and the Indian rupee is presently diminishing.
With the real estate market steadily recovering, NRIs are currently at ease making significant acquisitions. The demand for real estate in the luxury sector is growing, and in 2024, more growth is anticipated. NRIs have traditionally favoured luxury and ultra-luxury real estate. Since the epidemic, NRI tastes have also been dominated by second residences. They aspire to reside in a neighbourhood where all essential things are close by. An NRI consumer looks for a respectable real estate developer and a residence that fits their status.
NRIs living in the Gulf countries are eyeing Indian real estate due to several factors, including favourable government incentives, the use of digital technology, and a return to pre-pandemic levels. This has created a new market for luxury holiday homes in coastal areas and non-metro towns and cities and high-rise condos in big cities. NRIs are taking advantage of the weakening rupee and investing in Indian real estate to earn high returns. As more NRIs from the Gulf countries show interest in making high-risk investments in metro and non-metro cities, the Indian real estate market is projected to grow in 2023 and the coming years.
