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Real estate have always been a preferred investment choice for non resident Indians (NRIs). Realty purchases by expatriates constitute about 8% of all property transactions in the country. NRIs prefer to buy real estate as it is considered one of the safest investment avenues. Added to it, being a source of rental income, there is surety that the capital value will appreciate in future.
Whether this is the time for NRIs to make investment in the real estate? There are factors working in favour of the NRI investors:
Upper hand over the domestic investors:
Although the real estate sector in the country has been going through a lean phase in the past few months, if you are an NRI looking to invest in India, then it may turn out to be the ideal time to invest in real estate. The domestic investors are bogged down by the rising interest rate and the sluggish sales of homes as well as commercial spaces in the recent past. The finance ministry had to step into make flow of money into the realty sector more viable. Based on the rupee-dollar fluctuation, the value of property has decreased by up to 8-10 percent effectively. All this makes a perfect entry scene for an NRI investing in the realty scene.
The next motivating factor is the high returns expected out of the investment made. The Indian currency has fallen by around 20% against the US dollar in the recent time. Those looking at investing back in India can make use of the depreciation in the value of the rupee to build their investment portfolio. The real estate market has now turned sluggish and the depreciating rupee adds more power to dollars earned by the NRIs.
All these have triggered a substantial rise in the volume of property-related enquiries from the NRIs. It is a great opportunity for them to invest in Indian real estate. They can have very good returns on their investment. Only catch is that they have to make their decisions faster because the price of real estate is also growing in the metros, and growing exponentially in few of them.
NRI s cashing in:
The NRIs seem to have cashed on in the situation as many NRIs are even buying multiple units for investment purposes. In the last six months, developers and promoters have sold more than 300 units to NRIs in the NCR markets like Gurgaon, Noida, and Kundli. As luxury apartments have been a major attraction for the NRIs, they can invest in ready-to occupy units or projects nearing completion for better returns. Investment in Tier II and Tier III cities can be more beneficial as these cities have seen more appreciation than the metro cities,
The returns on property investments are always higher, compared to other investments, due to its minimal volatility and stable appreciations. For an NRI, this is a time to selectively put their investment into the real estate sector. The current decline in rupee against dollar has further attracted NRIs to invest in property and this temporary phase of slowdown in the rupee will fetch more returns to NRI’s who want to buy property in India.