Know why NRI home buyers are back on property developers’ radar
A slump in the consumer demand in the realty market has definitely hit the developers hard. But they can heave a sigh of relief. It seems our
“For a protracted period, investments in India did not offer good returns, causing NRIs to choose to invest in the countries they migrated to - or anywhere else where the markets were attractive. However, with the resurgence of the Indian economy after the arrival of a stable government intent on boosting business in the country, things are changing. Today, the Indian realty market is once again a prime focus area for NRI investors,” said Ashwinder Raj Singh, CEO, Residential Services at
He added that while NRI property buyers have their preferences amongst Indian cities, a larger chunk of investment in the residential property is done in these two cities—Delhi and Mumbai.
“Generally, the NRI community prefers to invest in their states of origin – primarily Kerala, Karnataka, Tamil Nadu, Maharashtra and Delhi NCR. However, since residential inventory has piled up in the two major cities of Delhi and Mumbai, investors are currently very well placed to find good bargains in these markets, as most developers there are offering discounts and attractive financial schemes,” Singh noted.
According to industry experts, NRIs who are soon to retire should look at investing in India as the basic social
However, the industry also suggested that NRIs must consult professionals with extensive research-driven background to ensure that they will get the best returns for their investment. “As a rule, NRI investors should be wary of projects by unknown developers who have no existing track record. Innumerable numbers of buyers are currently falling in trouble because they have plugged their funds in projects which do not have all the mandatory clearances and fall short of even the minimum standards of quality construction. Unless a NRI plans to visit India and personally evaluate projects, he or she should opt only for reputed developers,” he stated.
Additionally, he said that NRIs should take care of other factors such as the credibility and brand visibility of a developer in the market, the location of the project in terms of social and civic infrastructure, the amenities and the timelines for possession in the case of under-construction projects.
“NRI investors focused on benefiting from discounts can consider booking in projects which are in the pre-launch stage, as prices tend to be competitive. Again - while due diligence is important for end-users, it is even more important for investors who are considering projects in upcoming or peripheral locations of the primary cities. Professional real estate advisors should be consulted to establish for the legitimacy of such projects,” said Singh.
It should be noted that in the last few years, Indian developers had miscalculated the demand in the market and how much buyers - including NRIs - are willing to spend on their first or second homes. This resulted in increased levels of supply overhang of larger-configuration apartments. However, selective correction in many such property markets is taking place and the prices of real estate projects is expected to come down substantially.
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