By Akhil Gupta

India’s real estate industry has been experiencing a dynamic transformation; the depreciation of the Indian rupee, with a significant 11% drop in its value against the US dollar, has created a window of opportunity for the Indian real estate market to attract more investments from Non-Resident Indians (NRIs).

What’s driving this surge in demand? The answer is two-fold: better returns on investment and a hassle-free investment process. Post Covid-19, Indian real estate has emerged as a lucrative investment option with potential capital appreciation. With the digitalization of the real estate industry in India, NRIs can now conveniently explore, evaluate, and invest in properties from the comfort of their homes, reducing the complexities and uncertainties traditionally associated with NRI investments in Indian real estate and making it more attractive and accessible for NRIs.

Previously, if an NRI wanted to purchase a property in India, they would have to typically rely on a relative or the intelligence of brokers who were mostly driven by personal motives. Relatives would also most likely suggest as per convenience. Power of attorney, paper work, etc. were added challenges. But technology has made this entire process seamless and hassle free. All the information that one might want to avail on best projects to invest in, with clear understanding of pros and cons, city specific patterns of capital appreciation and developing areas, can now be had on your fingertips. And investing in real estate remotely is not a daunting task.

Why are NRIs investing in the Indian real estate market?

For Non-Resident Indians (NRIs), investing in Indian residential real estate holds financial as well as emotional significance. NRIs have a strong emotional connection to their roots in India, often driving their interest in investing in Indian residential real estate. Additionally, real estate is seen as a tangible asset that provides a sense of security and stability, making it an attractive investment option for NRIs.

The COVID-19 pandemic has undoubtedly had a significant impact on the Indian real estate industry, and the trend of owning a secured second home in their country of origin has gained momentum among NRIs.

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Apart from emotional connect, NRIs invest in Indian real estate for investment purposes. The rental yield which was typically between 2& and 3% has now shot up to 3%-5%, which makes real estate a good investment decision. The last two years have seen good capital appreciation across key localities in major cities and that has contributed to NRI interest in purchase of residential property in India. The momentum is likely to continue well into the year and beyond.

This shift has led to an increase in demand for larger and more luxurious homes with modern amenities. NRIs now seek ready-to-move-in properties with opulent interiors and projects nearing completion. Ticket sizes are mostly above INR 80 lakh and clear inclination towards gated communities for easier technology enabled management.

Commercial properties are a clear choice for NRIs investing from ROI point of view. They give better returns, and are much easier to manage.

NRIs show significant interest in popular cities such as Gurgaon, Bengaluru, and Hyderabad. In contrast, smaller tier-two cities such as Ahmedabad, Chandigarh, Thiruvananthapuram, and Kochi have also emerged as potential investment destinations, ranking high in real estate investment potential.

The impact cutting-edge technology in driving NRI real estate investment

The impact of technology on the real estate industry has been significant, particularly in how it has transformed the investment landscape for ex-pat buyers in Indian real estate. The adoption of digital platforms has revolutionised investing in Indian real estate, making it more accessible and transparent.

Virtual Reality (VR) headsets have emerged as a popular tool for property walkthroughs, providing potential buyers with a unique and immersive experience. This has revolutionised how NRIs invest in Indian real estate, with innovative solutions such as online launches, virtual property exhibitions, and digital transactions eliminating the need for physical visits.

It is noteworthy that the use of technology has not only benefited NRIs but has also positively impacted developers and real estate agents. Digital platforms have made it easier for developers to showcase their projects and for agents to reach a wider audience. Furthermore, using big data analytics has allowed developers to identify and target specific market segments, thereby increasing the efficiency of their marketing efforts.

(The author is Founder and Chief Tech & Product Officer. Views are personal.)