The depreciating rupee value and the continuing buoyancy in the Indian residential real estate market are significant draws for NRIs to invest in their country of origin. The latest CII-ANAROCK Consumer Sentiment Survey shows that Hyderabad, NCR, and Bengaluru are NRIs’ top picks for the housing investment. Interestingly, MMR comes a distant fourth on NRIs’ wish list.
Notably, at least 60% of NRI respondents will buy homes in one of these three cities, with 22% focused on Hyderabad, 20% eyeing NCR, and 18% preferring Bengaluru. In last year’s corresponding period survey, Bengaluru, Pune and Chennai were the top picks for most NRIs.
Of the 5,500 respondents participating in the survey, 7% were NRIs currently stationed in the US, Canada, Gulf, Europe, and various Asian countries.
Notably, more NRIs prefer investing in Indian real estate over stocks, mutual funds, gold, and fixed deposits. In the survey’s current (H1 2022) edition, 71% NRI respondents saw Indian housing as the best investment bet. This is markedly higher than the 55% in the pre-Covid edition.
“Despite the worst of Covid-19 now in the past, NRIs have clearly not forgotten the uncertainties associated with living in a foreign country during a major pandemic,” said Prashant Thakur, Sr. Director & Head – Research, ANAROCK Group. “Securing homes in India became, and remains, a priority for Indians everywhere. While domestic homeownership sentiment remains strong despite hardening home loan interest rates and property prices, the depreciating rupee value against the US dollar gives NRIs a distinct advantage.”
Housing has seen a 15-20% increase in NRI demand in the first nine months of 2022 compared to the corresponding period in 2021. “As per ANAROCK Research, the Jan-Sept period of 2022 saw approx. 2.73 lakh homes sold in the top 7 cities,” said Thakur, adding, “on an average, NRIs account for 10-15% of homes sold in any given quarter.”
Demand for bigger homes has been one of the defining new developments in the post-Covid era. While schools and offices have reopened, the desire for extra living space remains undiminished. Many of the large IT employers companies and IT-driven start-ups now operate on a hybrid work model.
For NRIs, the favourable exchange rate is another prime motivator to secure bigger homes. The current H1 2022 survey finds that over 77% NRI respondents will buy bigger homes – 54% favouring 3BHKs and 23% looking to buy 4BHKs. Just 22% NRI respondents are now looking for 2BHKs. In the pre-Covid survey, at least 40% were eyeing 2BHKs.
63% NRI respondents currently prefer premium properties priced between INR 90 lakh and INR 1.5 cr. In last year’s survey, 59% NRIs preferred luxury properties priced between INR 1.5 cr and INR 2.5 cr.
Many NRIs are now looking to shift back to India and actively use these homes. The current economic situation in many countries is uncertain because of the recessionary dynamics brought on by the Ukraine-Russia war, while the Indian economy is markedly better off.
Commenting on the survey, Amit Modi, Director, ABA Corp & President CREDAI Western UP, said, “The survey accurately depicts the sentiments of NRIs with respect to investment in real estate. It actually resonates with the early and mid-year estimates shared by experts, who promisingly projected that the NRI investments in real estate, especially luxury housing, governed by positive sentiments, will witness a sharp upsurge in 2022. Luxurious and fully or semi-furnished 2BHKs, 3BHKs, and 4BHK independent floors, condominiums, and villas are the most preferred formats which fit well within high housing budgets earmarked by NRIs.”
“On the other hand, the evolution of luxury housing standards has been quite impressive. Gurugram’s luxury projects, supported by high-end amenities and security functionalities, mirror a Europeanised way of lifestyle, which NRIs are used to and also pally and associate with. The purpose could be either permanent settlements or for temporary getaways during the holiday seasons. The survey harps upon the buying sentiments of NRIs and indicates their special liking towards bigger and better homes. Well-established road and infrastructural connectivity, business opportunities, and scalable holistic developments, on all fronts also serve as secondary reasons for luxury housing investments by NRIs in Noida,” Modi added.
Ashwinder R Singh, CEO-Residential, Bhartiya Urban, said, “The NCR region, specially Noida and Greater Noida, is being developed in a phased manner and the price point of Rs 1 cr and below is what is dominant in supply in this market. This is the reason for increased NRI investment specially from mid-income group working in the UAE in the age group of 45-50 buying it primarily for retirement homes.”