The Indian real estate sector has remained a hot favourite of property investors from across the world. Being a basket of several options in terms of locations, Return on Investments and a propelling economy, India is a promising market for investors. Interestingly, the Non-Resident Indians (NRIs) have taken a keen interest in the property market of India. Despite short term challenges due to Coronavirus, the investors are optimistic about the future investment scenario. Here are four reasons as to why the NRI investor must keep investing in Indian real estate.
1.Booming market
Against the backdrop of the Coronavirus challenge, the Indian economy faced severe challenges and economic hardships. However, the pandemic is over, and the Indian economy is resurgent. The pent-up demand has started to come to the fore, and the economy will grow leaps and bounds in the coming years.This will appreciate the property prices, and the NRI investors can expect a handsome ‘Return on Investment’ on the invested money. New segments of investment such as fractional ownership of land, co-working spaces,
2.Repo rate slashed
The reduction in repo rate by a cumulative 115 basis points so far this year to 4 per cent comes as a good tiding for the real estate sector. With home loan interest rates getting cheaper, it gives a convincing reason for fence-sitters to take the plunge into the real estate market. When we look at historical data of repo rates, in the year 2000, repo rate was at its peak at 13.5 per cent and in 2020 it’s nosedived to 4 per cent. It is always considered that the reduction in repo rate is inversely proportional to real estate growth. NRIs looking to invest in Indian real estate can make merry as this move will reduce borrowing costs and facilitate the easy availability of loans.
3.Reduced Interest in Other Instruments
Traditionally, the investor community from abroad used to prefer investment tools such as Fixed Deposit (FD), Gold, and Equity market. However, these investments are subject to market volatility, and the money remains at the perpetual risk of loss. Moreover, the falling returns potential of Gold and Fixed Deposits have discouraged expat investors. The interest rate in most of the Fixed Deposits remains at 4-5 percent, which is only comparable or equal to the inflation rate. This translates into poor returns.
4.Depreciating rupee
The rupee has gone into a downward spiral in the wake of the COVID crisis due to slowing economies and geopolitical tensions raging across the world. The value of rupee against dollar hit a historic low of Rs76.8, before gaining some lost ground. This development can tickle the expectations of NRIs who were waiting for a favourable opportunity to pour money in real estate. With the stock market and gold prices going for a freefall, investing in real estate stand as a good bet for NRIs to hedge against potential risks. In the two years to July 15, the Indian rupee has depreciated about 9 per cent. As the economy faces the pressures of a recession ahead, the rupee might witness a further dip in its value.The correction in Indian rupee value could help NRIs to save around 8-10 per cent while investing/buying property.
5.Luxury housing options in India:
NRIs typically prefer holistic, contemporary spaces where they can work, play, and rest well. The Indian real estate sector has gradually witnessed the entry of profound builders who create spaces that cater to wellness and are equipped with modern amenities, better connectivity, etc. This is an excellent motivator for NRIs to consider investment opportunities in the Indian real estate sector.
