The residential real estate market in India has witnessed a 35 per cent year-on-year (y-o-y) increase in non-resident Indians (NRI) investments over the past year, with the average ticket size investment falling between ₹90 lakh and ₹1.5 crore, Saurabh Garg, Co-founder and chief business officer, NoBroker, told businessline.
Although the trend is not novel, the upsurge in demand is substantial when contrasted with the period before the Covid-19 pandemic, during which it remained in single-digit figures.
Based on industry estimates, about ₹4,00,000 crore worth of housing sales take place in India in a year. Out of this, close to ₹50,000 crore (15-20 per cent) is NRI contribution (primary units). “Now, if we take primary as well as resale, then the total sales amount to ₹9,00,000 crore out of which close to ₹1,50,000 crore is NRI contribution,” explained Garg.
Explaining the increase in demand, he noted that several factors contribute to this rising demand, including NRIs’ interest in the potential for high returns and the stability of the Indian real estate market, which promises more consistent returns compared to options like stocks and cryptocurrency.
Furthermore, for premium properties, investors are increasingly inclined towards gated communities and land investments. A survey by the prop-tech unicorn revealed that 98 per cent of the demand is for gated communities due to their abundant amenities and ease of renting.
Additionally, approximately 25–30 per cent of the demand is driven by investors seeking good returns, while the remaining portion is for self-use, with a notable preference for 4 BHK units.
Key markets identified by the unicorn include Chennai, Pune, and Bengaluru, which have witnessed a significant influx of investments, resulting in an 18 per cent increase in premium and luxury property investments. Of the top three, Chennai stands out as the most attractive market for premium properties for NRIs.
Additionally, a major chunk of the demand has come from the GCC region, followed by Singapore, the United States, and Australia.
The transformation in the NRI’s outlook towards Indian real estate is attributed to the improved ease of property management. According to Garg, one of the significant hurdles for NRIs in the past was the challenge of managing their properties in India.
Today’s real estate portals offer comprehensive property management services, encompassing property selection and tenant management. This reduces NRI investors’ reliance on relatives and brokers, making them more optimistic about investing in the Indian real estate market, said the co-founder.