NRI investor trends for 2018 in real estate

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NRIs are looking actively to invest in Indian real estate market to make the most of the price correction and depreciating rupee. To achieve this, they need to do proper research and planning to achieve the desired returns from the property investment.

Non-resident Indians (NRIs) have been a vital segment of investors in the Indian real estate market. NRIs typically purchase properties in India mainly for investment purposes and for settling back to the country once they finally relocate. Reports show that NRI interest has revived in Indian real estate following recent economic and realty regulatory reforms. Market statistics indicate that the leading metro cities continue to hold NRI interest. NRI capital contribution to developer sales is set to increase in the upcoming quarter. Delhi NCR, Mumbai, Bangalore, Hyderabad, Chennai and Pune remain the hotspots for investment. Let’s look at various segments that could be on the radar of NRI property buyers:

1. Commercial properties - Commercial properties have a better rate of return ( ROI) and fewer delivery timeline issues. These two aspects have increased NRIs interest in the commercial real estate. Many young NRIs who wish to settle in India and continue with their respective professions are investing in commercial spaces. Residential investment is also guided mainly by the preferred place to work. The salaried employees choose cities like Ahmedabad, Mumbai and Bangalore, whereas self-employed and high professional NRIs majorly select Gurgaon and Pune. In 2018, the trend for office space is also expected to rise. 

 

City

Area

Price (per sq ft)

Mumbai

East and West Region

Rs.11,200-11,400

Ahmedabad

SG Highway, Gota, Prahlad Nagar

Rs.3,500-5,400

Bangalore

Hennur road, Surajpur road Bannerghatta road

Rs.5,150-5,400

 

2. Second homes - The growth of second homes segment is a testimony to shifting mindset of NRIs. Buyers today do not just want a leisure home but a property that has a rental income prospect and a long-term rate of return. Individuals buying second homes hold the preference that property is within a few hours’ drive from their parent cities. Most of the buyers consider appreciation potential and rate of return when choosing a holiday home, and some buy a holiday home for a vacation. Buyers seem to prefer farmhouse or bungalows as second homes in developmental in areas like- 

 

State

Area

Price (In INR)

Delhi NCR

Mehrauli, Kasauli, Chattarpur

25-100 Million

Mumbai

Thane, Lonavala, Khandala, Alibaug

15-45 Million

Chennai

Coonoor, Puducherry and Coorg 

10-25 Million

 

3. Senior living – Analysts consider senior living homes as the sunrise segment of Indian real estate from NRIs. Recent research by PHD Chamber of Commerce concludes sector growth from $1.26 billion in 2016 to $7.7 billion by 2030.  Around 78 per cent of senior living residences in India is operated in the south and west regions, whereas only 22 per cent exist in northern India. Besides the metros and capitals, few emerging retirement-friendly destinations include Amritsar, Dehradun, Guwahati, Ranchi, Shillong, Nasik, Vadodara, Panaji, Surat, Coimbatore, Mysore and Puducherry. The per sq ft price of these areas is listed below- 

 

Region

Price (per sq ft)

West Region

Rs.9,000- Rs 10,000 

North Region

Rs.5,000- Rs 7,000 

South Region

Rs.4,000- Rs 8,000 

 

4. Villas – Villas have investment potential similar to apartments but with a high appreciation rate. Due to the high earnings and saving capacity, NRIs have shown a keen interest to invest in luxury villas. Some dominant developers in the country are also advancing to villas. As the income levels grow, NRIs shift their focus on villas and luxury apartments. The trend is set to increase, and with RERA in place, experts believe that the scope and demand for villas are set to grow in the upcoming years. The preferred locations include Goa, Hyderabad, Bangalore, Pune and Delhi.

Outlook

At an industry level, a massive change will take place that will cause a consistent reworking of the existing investment formulas being used in real estate industry. The recent institutional reforms will portray deciding roles in restoring the residential sector. RERA has been proclaimed as a real market force, and the transparency it implements will draw residential real estate back to centre-stage. Few government schemes are also aimed at ensuring the objective of Housing for All by 2022, which also includes affordable housing. Investment inquiries from the NRI section about the best affordable bets in the housing category are beginning to pour in. In a short time, the residential asset class will be able to catch up with commercial properties on the NRI property investment radar.

 

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  • Comments
  • Kamal June 28, 201811:19 am

    Very informative . Good work keep it up.

    Reply
    1. Akanksha Harjai

      Akanksha Harjai July 24, 201810:43 am

      Thank you

      Reply
  • Sachin July 12, 201810:42 pm

    Nice Article

    Reply
  • praveen July 13, 201810:43 am

    Nice information shared,very useful article

    Reply
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