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NRIs rush to snap up real estate in India

NRIs realised the value of having a residential property in their home country

The pandemic has induced a curious twist to India’s real estate industry, labouring under the slowdown and the disrepute caused by stalled projects and fly-by-night developers. Instead of dulling the market further, the lockdown and global panic over Covid-19 seems to have translated into a renewed interest in the market by a high-value customer segment—non-resident Indians (NRIs).

“NRIs have always invested in India but mainly for investment or rental purposes. However, when the Covid-19 pandemic struck and people were forced to isolate, the community realised the value of having a residential property in their home country for settling (down) in the future,” explains Hakim Lakdawala, group promoter of Mumbai-based realty major Goodwill Developers.

According to the CII-Anarock Indian Real Estate Vision 2025 study released recently, 38% of those who booked a property recently in India were NRIs. “The pandemic has increased NRIs emotional association of longterm security with physical assets,” Prashant Thakur, director & head (research) of Anarock says, adding, “They are also driven by the uncertainties posed by Covid-19. Majority of NRIs are buying for end use, not as investments.”

For NRIs, the harsh quarantine measures as well as medical facilities being overwhelmed in countries like UK, Italy etc could have led to a apocryphal realisation on the importance of having a home of their own, preferably in their home country. For example, leading South Indian real estate player Puravankara says flats and villas sold to NRIs went up 40% since Covid struck, compared to the previous year. “We saw a surge in demand from NRIs for luxury and ultra-luxury apartments,” says Ashish R. Puravanakara, managing director. “The pandemic seems to have led to an increased demand for space and gated communities with amenities.”

Sound economics also helped. “One of the key factors that is driving the NRI interest is the depreciation of Indian Rupee,” argues Farshid Cooper, managing director of Spenta Corporation. “Along with the depreciation of the Indian rupee, reduction in stamp duty in states like Maharashtra, offers by the developers, extension of RERA deadline as part of the Atmanirbhar Bharat package, RBI extending the loan moratorium and the very recent that of reduction in premiums by 50% in Maharashtra has definitely paved the way for demand rise,” he adds.

Technology, too, helped, since it was difficult for NRIs to travel and scout properties. “Most developers swiftly adapted to giving virtual tours of homes and real estate properties,” points out Lakdawala. “This has enabled buyers to digitally inspect, process documents and papers, and even make the purchase without having to physically travel to their home country.”

Agrees Ashish Puravankara, “Some of them visited our website and decided to buy the property through our online selling platform. We expect this momentum to continue (in) the coming financial year.”