UAE NRIs on building home away from home

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An under-construction building rises amongst residential buildings in Mumbai.
An under-construction building rises amongst residential buildings in Mumbai.

Dubai - NRIs account for about 17-18% of HDFC's total loans, largely from the Gulf region.

By Sandhya D'Mello

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Published: Fri 26 Feb 2016, 11:00 PM

Last updated: Sun 28 Feb 2016, 8:15 AM

The Indian expat community in the UAE is all set to see the budget 2016-2017 unfold on Monday - February 29, 2016 - with hopes and expectations in the new light of bilateral ties between the two countries. One of the most common thing that 2.6 million NRIs residing in this country do or are about to is building home away from home and that is of prime interest as investment in Indian realty sector not only serves as safe haven but also in earning the income to off set the loan instalments.

Renu Sud Karnad, managing director, HDFC, said: "NRIs contribute about 17-18 per cent of our total loans which is substantial and this comes to us largely from the Gulf region. The NRI community from UAE forms an important segment for HDFC and is growing. Our NRI business in UAE has also fared well and the growth has been in line with our overall business growth. With NRI's considering buying home back in India as safe and secure investment there has been a good demand from the GCC countries due to stability in housing prices coupled with drop in interest rates in 2015."
The home finance provider sees growth in UAE with the Indian real estate sector becoming of prime importance to the government and with loads of measures being announced in recent times such as Smart cities, Housing for All and ease of FDI norms providing a good opportunity for NRI investments. HDFC has a wide network of 396 outlets across India and International offices in London, Singapore and across the GCC region. The company brings together large number of developers from India in organising road shows and exhibitions regularly across various parts of the world.
"Such exhibitions are very important from the point of view of our NRI customers, as without travelling to India they are able to take a call on buying a property back in India. In short through our experience we empower our customers to make that one crucial and informed decision while buying their dream house. NRIs and PIOs form an important segment for us. We always look for opportunity to reach out and expand our operations," said Karnad. The Indian government is already on the right track with their '100 Smart Cities' initiative. This will provide ample opportunities for NRIs to invest in India. At the same time to attract investment in real estate, the government is trying its best to provide better infrastructure, better transportation network and other basic needs such as water, sanitation and electricity coupled with easing regulations and norms currently required to be fulfilled by NRIs.
" The demand for housing in India will structurally remain strong for a number of years. We have a young population, rapid urbanisation, more and more nuclear families and above all a huge existing shortage of 18.78 million houses in urban India. So demand will always be there. Having said that last two years there has been a time correction as property prices have not moved up while the income levels have. Hence buying a property is more affordable that it was two years ago," said Karnad.
Waiting for bold budget decisions...
Anis Sajan, MD, Danube
Everyone is waiting for a bold policy decisions from Indian government for boosting investments. Currently interest on home loans is presently allowed only after possession of property. But every one is expecting government to change this provision to allow this interest deduction from the date buyer start paying interest even during the property construction period. Also the present maximum allowable deduction for interest paid for home loans on self occupied property is Rs2 lakhs, which many are hoping will be increased to Rs3 lakhs. Indian realty sector is just emerging from a slowdown.
Ranjeet Chavan, CEO, SPF Realty
I think the Indian government should implement a few regulations, similar to how things are in Dubai, for example ease of property transfer process, easier tenancy laws, which in my opinion is one of the first deterrents in the minds of NRI investors when it comes to investing in the Indian real estate markets.The loading of common areas on to the net sellable areas should also be standardised and if possible they should, in fact change it to net areas only.
On off-plan properties, something like escrow accounts should also be considered to be mandatory, so that the investors feel secure about their investments.

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