For a long period, investments in India did not offer decent revenues as a result of which NRIs chose to invest in the countries they migrated to or anywhere else. However, with resurrection of our Indian economy with a stable government, the Indian realty market has become a prime focus area for NRI investors once again. The Indian realty sector across the residential, retail, hospitality as well as the commercial sectors is expected to grow at a rate of 30 per cent over the next decade, attaining a market size of around $180 billion by 2020.
NRIs today are keenly aware that Indian real estate once again offers them a very viable investment proposition. That said, they do have their own leanings and preferences when it comes to thinking about where to invest. The NRI community in general prefers to invest in their states of origin, namely —Kerala, Karnataka, Tamil Nadu, Delhi & Maharashtra. However, since residential inventory has loaded up in Delhi and Mumbai, investors are currently very well positioned to find good bargains in these markets, as most developers offer good discounts and feasible financial schemes.
Current Indian Real Estate Scenario
Indian developers had to deal with certain immutable market certainties in the last two years. In many cities, they have misjudged the actual demand locations and the number of buyers, including NRIs that are willing to spend on their first or second homes. This, as a result, has generated some troublesome stages of supply overhang of larger-configuration apartments. Real estate developers are now becoming quite thoughtful about quoting the right sizes and prices of products to make them attractive to a larger cross-section of customers.
Evaluating Pricing Trends
Residential property prices have reached a saturation level in both, Delhi and Mumbai. Good returns can be expected only if one’s investment history is close to about three years or more. In such a case, yearly revenues of 10 per cent can be anticipated from the third year on. Inactive sales, especially in the luxury segment, have resulted in the developers offering several attractive financial schemes.
Guiding NRI Investors
For NRIs who are on the verge of retiring in India, this is the right time for them to invest. The community infrastructure is being shaped up in most of the large cities and areas, through which hospitals, schools, shopping malls are leading to improved connectivity and accessibility of utilities which is causing a comfort of living.
With the prime residence being secured, NRIs with abundant assets can think of investing in rental apartments to generate further income. As a rule, NRI investors should be careful of projects by unknown developers who have no existing track record. Unless an NRI decides to visit India and personally assess the projects, he/she should only deal with reputed developers.
NRI investors looking to benefit from discounts can consider reservation in projects which are in the yet to be launched, as prices tend to be competitive. Also, professional real estate consultants should be consulted to understand the legitimacy of such projects.
Developers have conventionally tried to entice NRIs by gearing marketing campaigns of projects which are basic in every respect straight at them. NRIs must be careful about the fact that there is nothing about ‘NRI projects’ that is completely exclusive from other deals on the market – there are no ‘special’ features that would be otherwise unavailable to other buyers.