Over 75% NRI buyers prefer investing in their hometowns

India is one of the fastest growing real estate markets globally and the residential segment is a major contributor, accounting for 80% of the overall market.

NEW DELHI: NRI buyers make a beeline for their hometowns when buying property in India, finds a study by KPMG India and Google in 2018. As many as 78% NRI home buyers said this gives them the confidence to return back to India and stay with their family when they grow old. India is one of the fastest growing real estate markets globally and the residential segment is a major contributor, accounting for 80% of the overall market.

Preferred destinations for NRI investments are also no longer limited to the metros. Top destinations include - Kochi, Coimbatore, Bengaluru, Chennai, Ahmedabad, Hyderabad, Trivandrum, Chandigarh, Pune and Mumbai. Other smaller cities like Vadodara, Nashik, Noida and Ghaziabad are also witnessing a rise in NRI investments.

Increasing transparency due to RERA and other policy initiatives is prompting NRIs to invest in real estate back home.

Buying property in India is affordable to NRIs because of the currency advantage.

NRIs are a major source of international revenues for Indian players. Key source countries of NRI’s are UAE (20%), USA (18%), UK (7%) and Canada (6%). Aided by recent regulatory reforms, NRIs are now increasingly considering real estate in their hometowns and non-metro cities as profitable investment options.

The domestic real estate market offers superior long-term returns. “RERA has ensured that investment into residential property is much safer and the risks previously attached to home purchase have thereby been moderated. Also, considering that many NRIs will return to India at some point, owning a home in their respective cities is a very sound investment for the future,” says Santhosh Kumar, vice-chairman of ANAROCK Property Consultants.

Indian Rupee

Currently, the Rupee is trading over Rs 70 against the US dollar. The consistent fall in Indian currency has made it lucrative for NRIs to invest here. “Fluctuation in the value of the Rupee has made it advantageous for those earning in foreign currencies to buy property in Indian Rupees. Buying property in India has turned more attractive because NRI property buyers get more square feet of space for the same amount in foreign currency. For NRIs, the situation is a deja-vu of sorts – it is the same as the scenario we witnessed in 2012,” said Niranjan Hiranandani, national president, NAREDCO.

“Property prices at primary level are down by 10-15 per cent and the currency valuation adds another 10-15 per cent, so it is definitely a scenario where the NRI buyer is back,” adds Hiranandani.

Currency Advantage

To buy a house worth Rs 50 lakh, the average investment by an NRI living in UAE will be about 2.50 lakh Dhiram; a person living in the US will be spending a little over $68,000; and a UK resident will pay about 51,000 pounds.

Rs 50 lakh in other currencies:

Developers feel that this is a perfect time for investment in the realty sector.

“With successful implementation of RERA, the confidence amongst the buyers has increased considerably. With rupee depreciating to an all-time low, real estate investment for NRI’s has become furthermore lucrative and reassuring,” says Ashish Shah, COO of a leading real estate company.

Majority Indians staying abroad eventually wish to come back home which has now become more convenient, as premium developers in India now offer residential developments with international standards giving NRI’s the best of both the worlds i.e. they stay close to their family without compromising on their lifestyle.

Stay on top of NRI news with the WelcomeNRI.