Survey reveals NRIs' favourite place to invest in

The Indian real estate market is once again attracting the attention of NRIs, especially those living in the Gulf, thanks to the new regulatory environment driven by RERA, the Real Estate Regulation Act, the demonetisation of the rupee, and the introduction of GST. Analysts claim that these significant changes have cleared a lot of misgivings about investing in properties and are encouraging investments by overseas Indians.

"Most NRIs, regardless of whether they are permanently stationed or well-settled abroad, at some point entertain a fond wish to buy a home in India - if not for themselves, then for their families back home," explains Prashant Thakur, Head, Research at Anarock Property Consultants. "Buying a property is still a mark of prestige and accomplishment for any Indian, regardless of where they are in the world. Nor will most NRIs ever entirely shed a feeling of responsibility towards their families back home."

A recent Consumer Sentiment Outlook survey by Anarock revealed that real estate continues to be the favourite investment option in India for most NRIs. As many as 78 per cent NRI respondents preferred real estate over other asset classes - stocks, FDs, mutual funds, etc. - largely because of the charm of owning a property back in their country of origin, he adds.

NRIs from around the globe, especially in countries where the local currency is favourable against the rupee, are now interested in buying properties in India. They include Indian-origin people in the US, most of Europe, the UK and Singapore. "Gulf-based NRIs are in any case very well disposed towards owning homes in India - depending on which sector they work in, their work tenure and their purchasing power," he adds.

Leading participants at the recent India Real Estate Show 2018 in Dubai also told NRI visitors this was the right time to invest in properties in India. "It is a very good time to buy due to the weakening of the Indian rupee," remarked Vinay Kumar, Head of International Marketing for Sobha. "For the same value, you can now buy a bigger house compared to last year. So, it is a very good time to buy. As the Indian economy is growing, it will benefit all."

NRIs in the UAE prefer to invest in real estate in a large number of Indian cities including Pune, Bengaluru, Mumbai and Hyderabad. According to Kumar, Bengaluru and Pune are promising cities, especially in terms of the price index and capital appreciation. "Both cities are also seeing a good response from NRIs because of the growth potential in terms of job prospects," he adds.

In fact, the demand is not just from NRIs in the UAE, but also from the UK and Australia. The India Real Estate show saw a large number of end-users and serious buyers attend the event. "On average, our marketing people were spending around 15-20 minutes with each customer," said Kumar. "This means customers are not just coming in and walking off but in fact are serious buyers."

With the response to the first edition being positive, the company would participate in next year's event as well. He adds, "Even in the first year the organisers have managed to attract large crowds and the expectation will go up next year when we expect a better event and turnout.

Another executive from the sector said most of the demand was for properties in the affordable segment. "This is the right time to buy property in India because the rupee has been going down and real estate was on a roller-coaster during the last three years," explains Mohammed Akbar Baig, Relationship Manager at Puravankara. "But thanks to the introduction of RERA, GST and demonetisation, we now have a standard procedure."

The coming years will see a lot of demand for properties as the system is now in place, he avers. And because of RERA, it is a customer-centric market. "The developer has to abide by the rules of Rera," he explains. "So it is a good time to invest in real estate especially in places like Bengaluru and Pune because IT companies are expanding there."

Hyderabad is also an ideal location as many companies are moving there and the government is also supportive of the development. And prices in Mumbai have also peaked now, he adds. Asked about the response from potential buyers to the Dubai exhibition, Baig said it was the best event in terms of walk-ins, "As we witnessed 50-plus registration for walk-ins at our stall on the first day. They were genuine customers. Out of those 50-plus walk-ins, I can confidently say that 15 were strong prospects," added Baig.

Sanjay Mehrotra, National Head of Sales for Marketing and CRM at L&T Realty, notes that Mumbai, Bengaluru and Pune are the hottest markets for NRIs followed by north and other southern cities.
"Hyderabad is picking up because the government is building infrastructure and IT companies are coming here," he says. "It is a sunrise location, but it may take some time for people to get returns. I think Bengaluru has done well in the last 12 to 18 months. But higher appreciation is expected in Mumbai."
Overall the market should pick up because RERA has brought a lot of confidence and discipline in the market, adds Mehrotra. Developers are also more cautious now.

But he advised NRIs to do their homework and due diligence before buying property. "They may try to save 1-2 per cent but might lose the entire money. You need to ensure that the credentials of the developer are good." Referring to the event, Mehrotra described it as "the mother of all shows."

Another exhibitor who was thrilled with the response to the event was Tarendra Singh, Deputy General Manager for International Sales at Godrej Properties. "We are quite happy with the response as we saw significant walk-ins on both days. The best part is that those who visited us were good potential clients who were interested in projects across cities such as Mumbai, Pune and Bengaluru."  

- nithin@khaleejtimes.com