Why Are NRIs Investing In India’s Luxury Real Estate?
Investments are now more transparent and profitable thanks to government reforms like the RERA. Luxury real estate in India is increasingly being purchased by non-resident Indians (NRIs). NRIs made $13.1 billion in real estate investments in India in 2022, and it is anticipated that this amount will rise by 12% in 2023. NRIs now contribute twice as much to the Indian real estate market, increasing their influence. International purchasers now account for about 20% of many real estate companies’ sales, up from fewer than 10% before the epidemic.
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The demand for luxury real estate is rising among Indians who are not residents. But why is this taking place? We examine some of the primary causes behind this tendency in more detail.
Matching international standards
India’s luxury real estate boom has been significantly influenced by Indian developers. They have kept up with trends around the world and have continued to innovate, adding luxury qualities to their products. Luxury properties have gained popularity among NRI purchasers as a result of the real estate industry adhering to international norms.
Appeal of high rental yields
Luxury properties provide NRIs investing in Indian real estate a significant benefit, such as better rental yields than conventional properties. Rent demand has increased recently, especially in Tier 1 cities, as a result of wealthy people looking for opulent lodging. As a result, NRIs have the lucrative option to invest in opulent homes and generate a reliable and sizable source of rental income.
Greater confidence and transparency
Government reforms like the Real Estate Regulatory Authority Act (RERA) have greatly increased openness in the real estate industry in India. NRIs and HNIs now feel more comfortable investing in the real estate market as a result of this action. One portal contains all the details about a property, including approvals, permits, and finances. No hidden fees or phoney deals may therefore be made, resulting in better prices and increased sales.
Second home or vacation property
Most people had idealistic views of vacation homes. However, there has been a noteworthy shift in how NRIs view vacation properties. They can now provide a reliable source of income as potential investment possibilities. More NRIs are preferring to remain close to their family as a result of the COVID-19 pandemic. Most NRIs choose owning a second house in India, particularly in the locations where their families reside. Over the previous year, NRI investments in India’s residential real estate have increased by 35% year over year, with the average ticket size lying between Rs 90 lakh and Rs 1.5 crore.
High value liquidity
Luxury properties are always in demand since they are uncommon and special. Because of their exclusivity, they are more liquid for NRIs, allowing them to sell their home fast if they so want. Luxury residences sell for more money than properties in the mass market because their worth never decreases. NRIs benefit from the financial flexibility this liquidity offers.
NRIs are increasingly investing in residential real estate as India quickly rises to become the third-largest economy by 2030 in order to participate in this explosive expansion. This industry will continue to grow as NRI investments rise. Given India’s demographic advantage and substantial structural developments, real estate continues to be a solid and attractive investment option for anyone. The Indian real estate sector has a promising future, with potential advantages for both domestic and NRI investors.
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