Non-Resident Indian (NRI) investments in the real estate sector in India are seeing major trend changes, with expat Indians increasingly looking to diversify their portfolio by investing in various locations and price points, industry insiders said.
Many NRIs – mostly from the Gulf region – are also opting to invest in rental properties in India as a means of generating passive income.
Indian expats are also showing an increased interest in investing in commercial properties, such as office buildings and retail spaces.
NRI investments
“Till mid-last year or so, the majority of NRIs were buying mostly residential properties for end-use, and not as investments. This has changed of late, with many of them looking at real estate assets back home for investment purposes,” Shajai Jacob, chief executive officer – GCC of Anarock, a leading real estate consultancy operating in India and GCC, told Arabian Business.
“Most NRIs now gravitate towards projects by large or listed developers because of lower development risk, superior quality and higher potential ROI (return on investment),” Jacob said.
Gulf-based expat Indians account for the largest share of NRI investments in the Indian real estate sector.
The changing preferences of NRI investments come amid a significant demand pickup in the Indian real estate sector in recent months, leading to firming up of property prices in many cities, especially in the metros.
Senior executives at some of the other developers in India said expat Indians are now increasingly opting for under-construction projects by leading developers, contrary to the earlier trend of bulk of the NRI demand being for ready-to-move-in properties.
“Big names in the industry [in India] now command considerable trust from expat Indians,” an executive with a Delhi-based real estate company said.
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The Indian property market has been seeing a surge in NRI investments in recent months, with the 2022 end festival period posting a 30 percent jump vis-à-vis last festive season.
The festival season in India starts from ‘Navratra’- Diwali days – considered as the most auspicious time for new investments – and lasts till January end.
Larger cities such as Mumbai, Delhi-NCR and India’s IT capital Bengaluru have seen the highest increase in NRI investments this season, according to industry insiders.
Some of the Tier 2 Southern Indian cities such as Kochi in Kerala and Coimbatore in Tamil Nadu also saw a higher jump in NRI investments this time around at 22-25 percent.
Luxury properties have emerged as a hot favourite with expat Indians this season as the depreciating rupee value, coupled with attractive developer discounts, offer greater buying power.
The current season also saw an increased interest in purchasing bigger homes by expat Indians.
Offers such as waiver of stamp duty, registration charges and premium charges for higher floors, besides additional packages such modular kitchens were among the incentives offered by several developers which drew large NRI interest in buying bigger housing units.
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