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Golden opportunity for NRI investors in India's booming real estate sector

Amidst currency depreciation and robust economic resilience, NRIs find lucrative opportunities in India’s real estate market

Published: Mon 27 Jan 2025, 10:35 AM

Updated: Mon 27 Jan 2025, 1:32 PM

  • By
  • Sandhya D’Mello

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Most Non-Resident Indians (NRIs), while working in the UAE, carefully monitor developments back home to navigate future investment opportunities or protect their existing portfolio, depending on the yields it offers.

Indian realty has remained and will continue to be a promising avenue to park investments as it encompasses sentiments and strategic investments. The recent depreciation of the rupee may bring cheer to the NRI community, but it does have implications on the domestic front in India.

India's real estate sector is currently a hotbed for investment, particularly for NRIs due to the favourable currency exchange rates. With the depreciation of the rupee, NRIs have a unique advantage in acquiring premium properties at relatively lower costs.

Experts opine that the regulatory framework of RERA; the depreciation of the Indian rupee making investments more lucrative; and India's relative economic resilience compared to other global markets are making realty investments more promising. Currently, INR is hovering at 86.58 against the US dollar and may touch 95.00, according to research analysts.

It may be recalled, the Indian rupee hit a record low of 86.04, closing at 85.9728 against the dollar, according to Bloomberg data on January 10. Gavekal Research analysts Udith Sikand and Tom Miller expect a larger depreciation, bringing the rupee to 95 this year. In their report, Sikand and Miller suggested a depreciation of up to 10 per cent could occur as the RBI adopts a more flexible exchange rate regime.

“With the weakening rupee, NRIs are poised to derive maximum value from their investments in Indian real estate. Their purchasing power has significantly increased, making high-value assets like luxury residences and commercial spaces in metropolitan areas more accessible,” said Shraddha Kedia-Agarwal, director, Transcon Developers.

Key areas like Mumbai, Lonavala, and Alibaug are witnessing significant interest for luxury and lifestyle properties. Developers are noting increased inquiries from overseas, drawn not only by financial prospects but also by the chance to connect with their roots.

According to the latest report by IMARC group, titled “India Real Estate Market Report by Property (Residential, Commercial, Industrial, Land), Business (Sales, Rental), Mode (Online, Offline), and Region 2025-33,” the India real estate market reached $302.9 billion in 2024.

Samyak Jain, director, Siddha Group.

Samyak Jain, director, Siddha Group.

Samyak Jain, director, Siddha Group, said: “Indian real estate has always been a favoured investment for NRIs. The housing projects that are strategically located in the center of the metro cities like Mumbai, are seeing increased interest as they offer unmatched connectivity, excellent growth potential, and rental returns. The combination of competitive pricing and the availability of world-class amenities positions Indian real estate as a compelling choice for NRIs."

The rapid urbanisation represents one of the key factors driving the market growth of real estate in India. In addition to this, population growth is significantly contributing to the market growth. Moreover, favourable government policies and initiatives play a crucial role in driving the market growth of real estate in the country, according to the IMARC group report.

The emergence of real estate investment trusts (REITs) is providing a new investment avenue for both domestic and international investors, thereby contributing to the market growth across the country. Looking forward, the market value is projected to reach $603.4 billion by 2033, expanding at a CAGR of nine per cent during 2025-20, says the IMARC group report.

Vikas Sutaria, founder, Iraah Lifespaces.

Vikas Sutaria, founder, Iraah Lifespaces.

Vikas Sutaria, founder, Iraah Lifespaces, said: “The Indian real estate market presents a unique proposition for NRIs during times of currency depreciation. This is particularly true for scenic holiday homes or high-end villa projects in destinations like Alibaug and Lonavala, where there is a rising interest from overseas investors. NRIs are increasingly seeking properties that offer a combination of lifestyle and investment potential."

Similarly, Rohan Khatau, director, CCI Projects, said the company has seen an uptick in interest from overseas buyers, especially in areas like Borivali-Kandivali in Mumbai's western suburbs.

Rohan Khatau, director, CCI Projects

Rohan Khatau, director, CCI Projects

“With the dollar gaining strength, NRIs can now secure high-quality properties at reduced costs. Moreover, the ongoing infrastructural developments like the metro connectivity and the Mumbai Coastal Road and consistent rental yields make Indian real estate a solid investment choice," said Khatau.

Panvel: A rising star in NRI real estate investments

Panvel's real estate is becoming a prime choice for NRI investors due to transformative infrastructure developments like the Navi Mumbai International Airport and Atal Setu, alongside its proximity to Mumbai. This region offers a unique blend of attractive pricing and high growth potential, making it ideal for those seeking value-driven investments.

Navin Makhija, managing director, The Wadhwa Group, said: “The Indian real estate sector has witnessed a paradigm shift, especially for NRI investors, thanks to regulatory reforms like RERA that have instilled trust by ensuring timely project completions and eliminating delays. While NRIs have the option to invest globally in markets like Europe, the US, or Dubai, India's robust economic growth, coupled with the sentimental connection many NRIs have with their homeland, makes it the most attractive investment destination.”

Navin Makhija, managing director, The Wadhwa Group.

Navin Makhija, managing director, The Wadhwa Group.

Makhija shared that at Wadhwa Wise City in Panvel, has seen significant interest from NRIs across various offerings, including plots, bungalows, ready apartments, and under-construction properties.

“The region's proximity to Mumbai, attractive pricing, and future growth potential create a compelling proposition, making it a win-win situation for NRI investors looking to benefit from India's growth trajectory," added Makhija.

Sentiment with Strategy Boosts Buying

Cities like Mumbai, Pune, and Bangalore, with their infrastructure-driven growth stories, continue to attract significant interest. However, NRIs are also exploring high-potential emerging locations in the peripheries of these metro cities, which offer the perfect blend of accessibility, affordability, and future growth.

Areas like Alibaug, Karjat, Lonavala, and Goa with their scenic beauty and upscale projects, are appealing to NRIs seeking second homes that double as lifestyle statements. Similarly, Tier-2 & Tier-3 cities like Ayodhya, Nashik, Shirdi, Kolhapur, Varanasi, Mathura, Haridwar, Dwarka, Ujjain, etc., are gaining prominence amongst NRIs due to their religious and cultural significance.

Mumbai-based realty expert Ketan Sawant said: "The depreciation of the Indian rupee has opened a gateway of opportunities for Non-Resident Indians (NRIs) to tap into India's thriving real estate sector. This shift is particularly compelling because it amplifies the value of their foreign currency, making premium real estate in metropolitan and Tier-2 cities much more accessible.”

NRIs are no longer solely focused on luxury homes; there is increasing interest in mixed-use developments, co-living spaces, and rental yield-driven investments.

“Investing in Indian real estate is not just about financial returns but also about retaining ties to their homeland and securing assets for future generations. The current currency dynamic, combined with the sector's maturity and promising trajectory, makes Indian real estate an unmissable opportunity for NRIs who want to blend sentiment with strategy," concludes Sawant.



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