The real estate market, while being impacted by the pandemic, has found a new silver lining in recent months, namely the NRI buyer. NRIs are investing sizably in the Indian real estate market for various reasons, including future security, earning attractive returns on investments and more.
The Indian real estate sector has managed to shake off its initial slump in the face of the COVID-19 pandemic, recovering strongly from the second half of 2020 and doing positively in 2021. However, one trend clearly stood out in this entire period, namely the fact that NRIs were playing a bigger role in the Indian realty market after the coronavirus outbreak. With record-low rates of interest on home loans and softer/stable property prices along with the falling currency, NRIs have started investing considerably in Indian real estate. Just after the first lockdown was disbanded in 2020, there was a huge increase in property purchase queries where NRIs started showing more interest in spacious housing units with good amenities and an emphasis on all-round wellbeing as per reports.
The pandemic has altered perceptions of home ownership for every buyer including the NRI who is now looking to own property in his or her hometown or in a major city in India. Multiple Indian State Governments have also come up with demand-boosting measures like stamp duty cuts while NRIs have also shown an increasing trend for investing in Indian realty for self-use rather than rental income. These market trends have paved the way towards highly favorable and positive sales figures overall.
Key Aspects Worth Noting
- Reports highlight $13.1 billion in investments in the Indian realty market by NRIs for FY2020-21 alone and forecast $14.9 billion in total for FY2021-22. This indicates 12% of growth in investments.
- Technology and its rapid adoption by the Indian real estate industry has also contributed to growth in NRI interest, enabling them to take digital walk-throughs and 3D tours while easily submitting all documents, inspecting all property papers and paying securely with a few clicks.
- Favourable currency shifts and stable property prices are big demand-drivers for NRIs who are now looking at properties for self-use. They are also driven by a future vision to come back or settle down in their hometowns or cities in the future.
- Many companies are also allowing permanent WFH options for employees, or providing more hybrid working options. This is another factor behind NRIs buying homes in India.
- NRIs are also more interested in purchasing bigger homes with green and eco-friendly features along with cutting-edge amenities such as EV charging, home automation, mobile controls for electronic appliances, temperature-controlled swimming pools, contactless entry and also proximity to major wellness and health facilities. They are also looking for projects with good access to the airport, supermarkets/shopping malls and other social infrastructure.
- Ready to move properties with designer and luxurious interiors and such projects nearing completion are drawing NRI buyers in large numbers.
Based on several reports, GCC (Gulf Cooperation Council) is still the biggest source for NRI investments in the country. This region collectively contributed 41% of total property investments by NRIs. The USA follows with 17% of total investments and then Singapore with 12% as its contribution. Other high-source markets include the UK, Canada, Kenya, Germany, and South Africa. Simultaneously, average ticket sizes for properties are on the upswing, with most buyers choosing bigger and more spacious housing units.
Reports clearly highlight how average ticket sizes of investments have crawled up to $124,000 for buyers in the USA as compared to $111,000 in FY20. They have also touched $93,000 for Singapore NRI buyers in comparison to $91,000 for FY20. Average ticket sizes have also touched $97,000 for NRIs in the UAE, indicating growth of 11.5%. Experts forecast that NRI investments should keep growing throughout 2022 and even in future years. The shift of the industry towards digital home-buying platforms will continue to be a radical move in attracting more global buyers. Both real estate platforms and developers have now realized the value of their digital assets throughout the entire industry spectrum.
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Buyers and investors will increasingly rely on 3D property viewing or walkthroughs, AR or VR-based designs and property concepts, digital project launches, virtual shows for properties, online transactions and more. These concepts have now become a reality due to the coronavirus outbreak. The Indian real estate industry has innovated and this approach is paying off considerably in recent months. The gap between domestic and foreign buyers has been filled up with the use of technology and more NRIs are finding it easier to invest in Indian real estate as a result. Indian developers now have their task cut out- Catering to growing and evolving requirements of NRI buyers.
