Non-resident Indians usually purchase a property in the country with the primary motive to either invest or use it for rental purposes.
NRI investment is a common aspect of the Indian economy. This trend has been witnessed in the real estate sector too. Non-resident Indians usually purchase a property in the country with the primary motive to either invest or use it for rental purposes. However, with the virus outbreak and resultant lockdown, many NRIs realized the essence of having a house in their home country to settle in the future. The pandemic, thus, made home-buying both lucrative and sentimental option for NRIs.
According to a recently-released Real Estate Vision 2025 study by CII-Anarock, 38% of those who booked Indian properties were NRIs. Increased transparency and eased investment norms have made the residential real estate market increasingly lucrative for UHNIs and NRIs. Events like the recent depreciation in the Indian rupee have further sweetened the deal as NRIs now have to spend less money than before to buy a home in the country. The significant drop in property rates, stricter regulatory measures, and enhanced consolidation in the sector have together created an attractive avenue for NRIs to invest.
Technology has played an important role to bridge the convenience gap between NRIs and domestic buyers. Most developers are offering virtual tours of their properties, simultaneously enabling buyers to digitally inspect the apartment, process documents, initiate paper-work, and even make the purchase without having to physically travel. Also, the advent of smarter home designs with eco-friendly features has led to an increased appeal for the international market.
NRIs are more likely to invest in options that match with their lifestyle i.e. an abundance of open green spaces that offer wellness and health amenities, along with unmatched connectivity and convenience. Buyers will be on the lookout for ready-to-move-in inventory or nearly completed projects due to WFH and non-availability of rental accommodation. Furthermore, increased investment in second homes that are away from the city will see good traction as they are far from all the hustle and bustle. Affordability is still a major concern for most prospective homebuyers because despite a change in preferences post-COVID-19, there is a renewed demand for bigger homes that provide more space.
The COVID-19 pandemic caused distress to the real estate industry due to several reasons such as migrant labour returning to their homes, delayed construction, and no physical visits by the customers. All these roadblocks lead to an urgent need for relief in this sector provided by the authorities. Government announcements and initiatives such as stamp duty reduction in Maharashtra, the extension of the RERA deadline as a part of the Atma-Nirbhar Package, RBI extending the loan moratorium, and the very recent reduction in premiums by 50% in Maharashtra have paved the way for rise of demand in cities like Mumbai and Pune.
In 2021, we can expect the demand for affordable housing to increase among NRIs and millennials owing to government schemes and the trend of remote working. With most companies opting for remote working in the foreseeable future, demand in Tier II and III cities is also expected to witness an increase.
(By Hakim Lakdawala, Group Promoter, Goodwill Developers)