NRIs May Drive India's Realty Revival

Outlook Money|July 2020

NRIs May Drive India's Realty Revival
Subdued property rates, falling rupee and abysmally low interest rates are making realty a lucrative choice for NRIs
Vishav
India’s already ailing real estate sector faced a snowball effect post pandemic when the global economy was struck by a crisis like never before. Private Equity (PE) investments in the real estate sector crashed by 93 per cent to around ₹1,800 crore during the first five months of 2020, down from about ₹25,000 crore in the corresponding period last year, mainly due to the nation-wide lockdown imposed since mid March.

However, there is a consensus that some new pockets of opportunities may actually help the crisis-ridden sector bounce back and emerge stronger.

According to Manju Yagnik, Vice Chairperson, Nahar Group and Vice President, NAREDCO, NRI investment is one such potential area, with increased uncertainty of jobs, visa related issues as expats.

Shveta Jain, Managing Director - Residential Services, Savills India, agrees and adds that NRIs had traditionally been buying properties in India. The sector sees highest remittances from the diaspora. Sadly, there has been a decline in NRI investment post 2014 when the residential market went through a slump.

“In the wake of the current crisis, we expect to see a heightened NRI activity driven by first-time homebuyers in the age group of 27 to 37. These purchases will be seen as a hedge and safeguard against crises. However, the rider to these purchases will be of right value and proven track record of the developers,” Jain says.

Promising Pockets

  • In Bangalore micro markets like Kanakapura Road, ORR, Devanahalli, Sarjapur Road
  • In NCR Sector 150 Noida, Noida City Center, Dwarka Expressway (Gurgaon)
  • In Pune Hinjewadi, Wagholi, Baner, Wakad

Source: 360Realtors

Yagnik adds that time couldn’t have been more beneficial for them to invest with a fall in Indian rupee, subdued property prices, over a decade low interest rates, reduced stamp duty in most states with unchanged ready reckoner rates in many markets including Maharashtra for FY21.

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July 2020