NRI demand for Indian real estate rising after reforms

Dubai - Around 80 exhibitors representing realty sector showcasing offerings at Times Realty India Expo in Dubai

The demand for property units from non-resident Indians (NRIs) has bounced back following a spate of regulatory reforms that helped propel the real estate sector on a strong recovery path, property analysts and developers said on Friday.
Some 80 exhibitors representing the Indian realty, who are showcasing at the Times Realty India Expo running in Dubai, will vouch for this revival of interest among their NRI customers given the visitor traffic witnessed on the opening day on Friday.
M.I. Sait, founder and chairman of Mindscape Exhibitions, the show organiser, said the Indian realty sector has been recovering from the after-effects of a combination of government regulations, and now is getting back to normalcy. "It has already overcome the impact of demonetisation and a series of reforms. Investor confidence is re-surfacing as India's real estate sector is projected to reach $180 billion by 2020 from $126 billion in 2015," said Sait.
The reforms initiated through the introduction of the Real Estate Regulatory Authority (Rera) are expected to consolidate the realty industry. Leading developers are seeing enquiries for joint venture development of stalled projects from smaller or financially weak developers as they could not meet the stringent norms imposed by RERA, said Virendra Adhikari, business head for the Middle East at Asset India.
The real estate sector is becoming much more organised and transparent. The government focus on "Housing for All" by 2022 has put focus on affordable housing segment and as a result more and more developers are coming up with projects in affordable segment, he said.
"All these put together has made the current times very exciting for developers, buyers and investors. The Times of India-Realty India Expo 2018 provides an opportunity to NRIs to interact with top developers from the major Indian cities like Chennai, Delhi NCR, Mumbai, Pune, Bengaluru, Hyderabad and Coimbatore, who are showcasing their portfolio in various budget segments and payment plans to suit to the requirement of NRIs living in the UAE," said Adhikari.
Prominent among exhibitors showcasing some flagship development are Lodha, GM Infinite, Mahindra, Shobha, Purvankara, Brigade, Godrej Properties, and Asset India Real Estate.
Regulatory reforms, steady demand generated through rapid urbanisation, rising household income and the emergence of affordable and nuclear housing are some of the key drivers of growth for the sector, according to a joint report by Credai and JLL.
Rera rules prohibit pre-launches by developers without approvals from the appropriate government authorities, mandate that developers put 70 per cent of project proceeds in an escrow account to avoid diversion of funds and submit delivery schedules to avoid project delays. The resultant transparency and efficient mechanism had injected a sense of confidence among homebuyers in general, property experts and exhibitors said.
According to the JLL report, investment inflows in the housing sector since 2014 have been Rs590 billion, about 47 per cent of the total invested money in real estate.
The report said the contribution of the residential segment to the GDP would almost double to 11 per cent by 2020. JLL also projected that the housing sector's contribution to the Indian GDP is expected to almost double to more than 11 per cent by 2020 up from estimated 5-6 per cent.
Developers said with the supply crunch hitting most of the metros due to the cascading impact of the Rera over the years and new launches dipping by 41 per cent last year, rental housing demand is inching a new high in many cities. NRI investors will be able to get guaranteed rental income properties with property management services offered by developers.
- issacjohn@khaleejtimes.com

• India