NRIs investing more in real estate

As per report, NRIs invested $13.1 billion in 2021 and this is likely to grow by 12 per cent to touch $14.9 billion in 2022.

Whether it is for personal use or as an investment option, the non-resident Indians (NRIs) are showing a greater interest in investing in real estate ventures especially residential homes and/or commercial properties. The real estate sector which contributes to seven per cent of India’s GDP has always been considered a secured investment option not just by Indian citizens but also NRIs. These expats see the investment in real estate as a risk-free option and one wherein the return on investment is usually high.

Several reports from various real estate surveys showcase that the housing demand in different cities, especially Hyderabad, is predominantly driven by end-users, high-net-worth individuals, and NRIs. As per a report by 360 Realtors pointed out that NRIs invested $13.1 billion in the financial year 2021 and this is likely to grow by 12 per cent to touch $14.9 billion in the financial year 2022.

In the post-pandemic world, it is becoming even more important for these expats to have a house of their own in their home country and this has led to an increase in real estate investment by these individuals. From investing in properties for personal use to seeing it as a stable return on the investment venture, the NRI investments in the real estate sector have been on an uptick in the past few years.

Most of these NRIs, according to experts, prefer to invest in luxury and ultra-luxury properties even as some are looking at investing a fraction of their amount in commercial properties as well. Many developers are also looking at constructing projects that cater to the needs and requirements of NRIs which could include spacious and smart homes.

“Fintech has created a one-stop solution for leasing, acquisition, loans, and financial modelling for property financing. Not only fintech but the interventions of new-age technologies are playing a vital role in enabling NRIs to invest in India without physically being present. Through Proptech, NRIs can virtually tour a property, and finalise their purchase with a click of a button through digital audits and smart contracts,” says Naveen Mypala, founder, Urban Living.

Hyderabad market

In Hyderabad, a stable government along with the presence of a growing IT population and the developing infrastructure has all contributed to the growth of real estate when compared to other States. With these points in mind, many NRIs or expats are investing in properties in Hyderabad either for their consumption or as an investment option.

“Despite being a forerunner in the IT industry and experiencing growing urbanisation, Hyderabad remains an affordable place for both company owners and inhabitants. In most Hyderabad neighbourhoods, average property costs range between Rs 5,000 and Rs 6,000 per square foot. As a city that welcomes migrants with a thriving software industry, it gives a massive boost to the investment possibilities in the rental real estate market since NRI investors prefer to invest in properties that generate rental income,” Mypala said.

With the recent adjustments in property prices, many NRIs can invest their funds in real estate and the city is also developing several key commercial centres, enticing NRIs to take the bet. The commercial properties offer lucrative investment properties with high capital appreciation and rental rates.

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