Undettered by the uncertain economic climate, non-resident Indians (NRIs)  are on a real estate buying binge in Karnataka, Tamil Nadu, and Kerala. If the pace of investment holds up, FY22 could see nearly $14.9 billion in NRI money flooding the Indian real estate market topping the record $13.1 billion investment in FY21, according to industry estimates.

“ NRIs usually buy property back home as a financial investment and for reasons of sentimental attachment,” said Reeza Sebastian, President, Residential, Embassy Group.

Depressed property prices at a time when domestic demand has plumetted, provides well-heeled NRIs with relatively better access to capital a good investment window.

 “A significant chunk of these NRIs make up India’s international ultra high networth individual population and about 55 per cent of them who own real estate in India will allocate their wealth towards buying a second home here, Sebastian said.

Embassy estimates that nearly 13.5 per cent of these millionaires will increase their investments in real estate over the next three years. By 2022, NRIs could account for some 30-35 per cent of all realty investments in India.

‘Attractive option’

The increased transparency in real estate transactions, easing of investment regulations and a weaker rupee are seen as some of the reasons for unabated NRI interest in real estate. “Over 75 per cent of NRI searches for assets is happening in the southern states,” she added.

The Middle-East continues to the the biggest source of such investments with nearly a 40 per cent share. This could be attributed to the UAE Dirham gaining value against the rupee and the fact that citizenship is not an option available to the Indians based in the Gulf region.”

“GCC is followed by the US expat community with an investment inflow of 17 per cent and Singapore with 12 per cent of investment inflow. Other major source markets include the UK, Germany, Kenya, South Africa, and Canada,” she added.

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