Real estate has long been considered a sound investment and for majority Indians, there is an emotional side to home ownership.
The Covid-19 pandemic has disrupted economies the world over and India is no exception. Despite several challenges faced during the last two years, the Indian real estate market seems to be thriving. The reopening of the property markets in India has led to an increased interest in buyers. One segment of clientele that contributed significantly to the real estate market’s growth is the Non-Resident Indians (NRIs). Thanks to the revised real-estate market regulations; making the whole process convenient.
The end of lockdowns and the re-opening of travel, along with favourable financing conditions have prompted NRIs to invest heavily in the Indian real estate. For NRIs, real estate investment brings in a plethora of opportunities. Let us look at the key factors that are driving sales and paving the way for buyers to invest in Indian real estate market.
According to NITI Aayog by 2040, real estate market will grow to Rs. 65,000 crore (US$ 9.30 billion) from Rs. 12,000 crore (US$ 1.72 billion) in 2019, and in India it is expected to reach US$ 1 trillion in market size by 2030, up from US$ 200 billion in 2021, and contribute 13 per cent to the country’s GDP by 2025.
With the Indian government becoming friendlier towards foreign investors and the Reserve Bank of India (RBI) and Securities and Exchange Board of India (SEBI) formulating several policies and guidelines for encouraging Foreign Direct Investments (FDI), NRIs are driving their investment focus towards India.
A recent report by Wisebiz, India’s leading Real Estate Market Research firm states that demand for residential properties has surged due to increased urbanization and rising household income. It further stated that NRIs have invested $13.3 billion in the Indian real estate market in FY 21, as against the earlier estimates of $13.1 billion. India is among the top 10 price appreciating housing markets internationally.
The low rate-of-interest of home loans is an added advantage. The NRIs also get an indexation benefit for properties held in India. For instance, immovable properties held for more than 24 months is treated as long-term capital asset and obtain an indexation benefit with simplified taxation at 20 per cent. The Income-tax Act of India also allows certain tax deductions under Sections 80C and 80TTA.
Reforms such as Goods and Services Tax (GST) and Real Estate (Regulation and Development) Act (RERA) have brought in transparency and heightened the confidence of buyers. NRI buyers now get a more simplified format of engagement and trustworthy developers and properties currently registered under RERA.
