During these uncertain times, non-resident Indians (NRIs) have realised the essence of having a house in their home country to settle in the future — this has led to major home-buying in the southern markets in Karnataka, Tamil Nadu, and Kerala.
“These NRI investments are a common aspect of the Indian economy. NRIs usually buy property in the country for both lucrative and sentimental options. Also, with the primary motive to either invest or use it for rental purposes,” said Reeza Sebastian, President – Residential, Embassy Group.
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Another reason for NRI sales is that the concept of remote working has dissolved all geographical boundaries. With businesses operating with a virtual workforce and employees working from home, there is increased demand for the second home market as well.
Quoting industry statistics, Sebastian said, “NRI investments in Indian real estate has hit an all-time high of $13.1 billion in FY21 and may rise to $14.9 billion in FY22. A significant percentage of these NRIs make up India’s International UHNI population and about 55 per cent of them who own real estate in India will allocate their wealth towards buying a second home here.”
“It is estimated that nearly 13.5 per cent of these millionaires will increase their investment in real estate in the next three years. By 2022, 30-35 per cent of investment towards real estate in India will come from the NRI segment,” she added.
Giving reasons for the strong interest by NRIs, Sebastian said, “NRIs are keen on making big-ticket investments in the real estate market as a result of increased transparency and eased investment norms, recent depreciation in the Indian rupee, stricter regulatory measures, and enhanced consolidation in the sector. Over 75 per cent of NRI searches are directed towards the southern states.”
On demand from geographies, she said, “GCC continues to be the major source of NRI investments in India and accounts for around 41 per cent of the total investments. This is attributed to the Dirham gaining value against the rupee and the fact that citizenship is not an option available to the Indians based in the Gulf region.”
“GCC is followed by the US’ expat community with an investment inflow of 17 per cent and Singapore with 12 per cent of investment inflow. Other major source markets include the UK, Germany, Kenya, South Africa, and Canada,” she added.