NRI Investors View Indian Real Estate Today
For a property sold after two years from the date of purchase, profit earned on the capital gain is exempted from the income tax. NRIs can invest and earn rental income in India without any trouble
Real estate has evolved extremely over the past few years. There is better transparency post implication of RERA and GST which has fuelled the buying decision of NRI community.
Additionally, the value of INR has been witnessing significant low against the value of US dollar as seen in past six months. A depreciating rupee creates an ideal environment to invest in Indian real estate, as the cost of acquisition of property becomes lesser for NRIs.
In the recent past, it has been observed that affordable housing has been a preferred investment choice by NRI’s owing to better returns on investment. Additionally, ease in funding, supplementary income while renting, etc. ease in FDI norms has only accelerated the home buying decision of NRI community.
It is also observed that smaller ticket sizes offer good investment opportunities for NRI home buyers as they bring good growth and more value for money in the short term. Also, Investing in a good brand can help in generating higher returns on investment during resale of the property.
As per a recent Consumer Sentiment outlook survey by property consultant ANAROCK, for instance, as many as 78 per cent NRI respondents prefer real estate over other asset classes – such as stocks, mutual funds, FDs, among others — largely because of the charm of owning a property back in their country of origin.
There are various benefits for NRI community who aspire to invest in real estate. For a property sold after two years from the date of purchase, profit earned on the capital gain is exempted from the income tax. NRIs can invest and earn rental income in India without any trouble.
Infrastructure development is also one of the prime focuses for the government. Talking about Mumbai itself, we are positive that with the upcoming infra projects such as Mumbai Metro Line, Mumbai Trans-Harbour Link (MTHL), Navi Mumbai International Airport (NMIA), Mumbai Coastal Road (MCR), proposed Versova-Virar Sea-Link etc. is surely going to boost the realty demand in nearby micro-markets.
Social infrastructure has also been improved remarkably. In Mumbai, the localities which were earlier considered ghost-towns have emerged and today have better social and civic infrastructure. As more hospitals, schools and shopping malls come up and connectivity improves, the situation is definitely going to woo NRIs who plan to return home post retirement and aim to enjoy quality of life.
With the increase in demand, developers will have to up their ante and bring in newer concepts of housing in Indian realty. Soon there will be more designer labels, high quality exteriors and interiors and highly evolved services that can help developers to differentiate their offerings from rest of the lot and cater to the taste of their high end customer base.
Additionally, some of them are also offering customized homes and allied services to attract NRI investment. Developers are also aggressively marketing their properties in the international arena through property shows, participation in events and exhibition and also by opening representative offices in various international locations. This helps in further encouraging NRIs interest in investing in residential homes in India.
With so many reforms taking place in the sector, the real estate sector is poised to witness an exponential growth in the coming years. The overall sentiment has been boosted owing to the multitude of reforms undertaken by the Government and the regulations have also been greatly simplified. Lenient FEMA (Foreign Exchange Management Act) policies and relaxation of RBI laws have revived NRI investment in the sector.
Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.