Why NRI investments have increased in the South Indian real estate market?

August 4, 2020 2:37 PM

The combination of the lowest home loan rate, falling rate of Indian rupee, great offers and deals, availability of houses and never before seen pricing makes this an ideal time for home buyers.

real estate, real estate in india, south india real estate market, Hyderabad, Bengaluru, Chennai, NRI investments, homebuyersGoing by the current trends, the industry expects NRI investments to rapidly increase in the coming months.

The real estate industry in India is going through a remarkable phase of transition and revival. During this period, Indian real estate is witnessing lots of interest from NRI homebuyers. The combination of the lowest home loan rate, falling rate of Indian rupee, great offers and deals, availability of houses and never before seen pricing makes this an ideal time for home buyers.

These circumstances have provided an ideal environment for NRIs to invest in real estate in India.

Why is South India the preferred market by NRI investors?

South India has always been an attractive real estate market for NRIs due to the availability of land at reasonable pricings, housing across segments, higher rental yields, on time completion of projects and good track record of developers here. Real estate in South India has whopping opportunities to turn dreams into reality and investments into wealth. A propitious investment climate, dynamic professional class and its well-developed corporate ecosystem has added to the lustre of real estate buying in the region. The real estate market is experiencing a boom in recent days and is further expected to see increasing demands due to a favourable investment climate and the Covid-19 pandemic.

Preferred Segments

Mid-size and affordable homes are seeing increased interest from resident Indians and young NRIs. Luxury homes, 3 bedroom and 4 bedroom homes are also witnessing increased demand from NRIs. During the lockdown, spacious homes have also garnered an increasing interest by home buyers owing to the work from home scenario.

Rapid Increase in NRI interests

In the last few months, the interest from NRI home buyers has increased. For NRIs, the idea of owning a home in their own nation is comforting and provides a safe haven. The prevailing pandemic has created uncertainty in the minds of NRIs. Loss of jobs and businesses have forced some of them to return to India. Owning a home here gives NRIs a sense of safety and continuance to fall back on in times of trouble. This also gives them an option to move back to the country upon retirement or to explore new business opportunities in the region. The Covid-19 pandemic has adversely impacted global stock markets. Investors feel that real estate is still a relatively stable investment option at lower risks.

Why is it the right time to invest?

The recent depreciation in the Indian rupee has sweetened the deal as NRIs now have to shell out lesser to buy a home. The significant drop in property rates, stricter regulatory measures, increased transparency and greater consolidation in the sector have together created a lucrative avenue for the NRIs to invest in the south Indian real estate market. COVID-19 had a drastic impact on pricings and demand in regions like Hyderabad, Bengaluru and Chennai. Consumer demand has spiked in these markets as more home buyers from across India and abroad are quickly taking advantage of the prevailing conditions to buy their dream homes.

Lower Property price & Attractive deals

Aimed at attracting new customers, developers are offering buyers some of the best deals seen in a long while. Offers such as innovative payment schemes, lowest home loan interests and rental guarantee have resulted in increased demand for residential real estate. The combination of these exciting deals makes investing in residential properties advantageous.

Government Reforms & Regulations

Implementation of RERA has strengthened the interests and confidence of NRI buyers. RERA addresses major concerns like lack of transparency in transactions, inordinate delays in project delivery, and the intent of the developers. Currently in India, home loan is at the lowest rate in last 15 years which makes ideal for buying homes. This has made home loans across established lenders more attractive encouraging home buyers and investors to invest in residential projects.

Good Rental yields

Real estate is not only an attractive asset class today but it also promises healthier returns when compared to other investment options; Good rental yields and capital appreciations have predisposed NRIs towards residential real estate investments. Rent is a big source of income and residential properties have a huge demand, especially in metro cities.

Going by the current trends, the industry expects NRI investments to rapidly increase in the coming months. According to industry leaders, the growing demand from the NRI community along with increasing demands by resident homebuyers will help the industry stabilize and return to normalcy in 2021.

(By Eshwar N, Chief Marketing Officer at CASAGRAND)

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