Blog Real Estate | India
Why Are Indian Luxury Properties so Appealing to NRI Investors?
- 5th Sep 2022
One of the most dynamic subsets of India's real estate industry is the high-end sector. These high-end real estate holdings have bounced back from the pandemic's devastating effects and shown remarkable resilience to market shifts.
The luxury market seems to have its own momentum and one that is permanent since the wealthy customers who drive it are not reliant on debt such as mortgages.
Developers of high-end real estate have, for the most part, been successful in creating projects that attract purchasers and satisfy the market.
Most of these high-end property purchasers in India are non-Indians who are interested in investing in high-end real estate in India but do not currently call the country home. These individuals are typically well-informed about the latest luxury developments in India and eager to make wise investments there.
The regaining of confidence among Non-Resident Indians has led to a rise in the luxury real estate market's absorption rates during the last three years (NRIs). Non-resident Indian (NRI) buyers would maintain a large presence in the luxury real estate market as a consequence of the higher expected returns provided by this sector.
Getting your product in front of prospective NRI clients is not hard in this day and age thanks to technology improvements and widespread accessibility. The majority of India's high-end property builders have offices in major cities like London, Dubai, New York, and others. Many luxury property developers in India make it a point to be able to host meetings, presentations, and events in any of the major NRI centres worldwide, even if they don't have a physical presence there.
The US dollar and the UK pound have strengthened against the Indian Rupee.
As a result, NRIs may take advantage of the fluctuations in the Indian rupee while purchasing high-end real estate outside of the country. When this occurs, most Indian developers step up their marketing efforts in an attempt to attract purchasers of high-end properties from outside India.
In addition to the reasons already mentioned, NRIs are becoming more active participants in the Indian luxury real estate market.
The Non-Resident Indian (NRI) population has adapted to a global lifestyle that provides them with the finest conveniences and services, particularly in the developed world. They are interested in buying and investing in India's real estate market, but they only want to look at the finest luxury real estate projects in India so that they may maintain a lifestyle as near as possible to their previous one.
An increase in the number of real estate transactions involving non-resident Indians (NRIs) is indicative of a trend that may have more to do with sentimental factors than purely monetary ones. The rise of these two factors may explain why NRIs are investing more money in the Indian property market.
Developers who have established credibility in the market, who build to exacting standards, who guarantee on-time deliveries, who provide outstanding customer service, and who have a genuine appreciation for providing 5-star experiences to guests are highly valued by today's non-resident Indian homebuyers.
The idea of luxury has evolved through time, and today's buyers want integrated systems that provide them with several options for striking a healthy work-life-life balance. There has been a shift toward individualised and fully serviced residences with upkeep, concierge services, high-end amenities, state-of-the-art security, and other fundamental features and services as a result of buyers realising the inherent value of such features and the investment opportunities that these residences present. Buyers have also begun to recognise the value of such features on their own, in addition to the financial benefits they provide.
The luxury real estate market has also been significantly affected by hybrid employment. Buyers in today's housing market want properties that cater to their needs in a variety of ways, including but not limited to: more open floor plans, more bedrooms, more outdoor living space, more windows and doors, and more secluded spaces. In addition, homes with plenty of windows appeal to purchasers. Properties near thriving social infrastructure, such as the best international schools, hospitals, retail spaces, and banks, are particularly attractive to non-resident Indians (NRIs), millennials, and other new-age buyers who are looking to experience the global lifestyle in the company of like-minded individuals. This is because buyers in the modern day, such as NRIs, millennials, and others, all want the same thing: a taste of the international scene with people who share their interests.
Foreign investors focussed India's luxury real estate market.
Foreign investors, or non-resident Indians (NRIs), are common buyers of Indian real estate for investment or rental income purposes. The prospect of profiting from real estate's tremendous price increase over time is another major motivator, along with the desire to provide a better environment for raising a family.
An all-time high of $13.1 billion was invested by nonresident Indians (NRIs) in Indian real estate in fiscal year (FY)21, and predictions suggest that it might rise to $14.9 billion in FY22.1. The majority of India's ultra-high-net-worth individuals (UHNIs) are interested in purchasing a second home, and this number accounts for around half of all NRIs who own property in India. Over 13.5 percent of these millionaires want to improve their real estate holdings during the next three years, as shown by the survey's findings. By 2022, experts expect that 30–35% of India's real estate investment would come from the market for NRIs, or non–resident Indians.
The rising popularity of second homes may be attributed in part to the growing popularity of both remote work (which eliminates the need for commuting) and hybrid employment (which is being provided by a growing number of businesses).
The southern Indian markets of Karnataka, Tamil Nadu, and Kerala are particularly attractive to non-resident Indians (NRIs) looking to buy real estate in India. As much as 75% of all purchases made by NRIs come from this group. Karnataka, a state in India, is a popular search term (31% of all queries). Bengaluru, with its abundance of MNCs and Fortune 500 companies, has seen India's greatest real estate demand.
An NRI may invest in high-end real estate with peace of mind and get the benefits of capital appreciation, high rental yields, and a stable income stream. The number of inquiries and requests from Gulf Cooperation Council (GCC), American, and British non-resident immigrants (NRIs) on the Indian real estate market has surged. These buyers are eager to make significant investments in the market because of recent changes, such as the recent devaluation of the Indian rupee, increased regulatory measures, and increasing industry consolidation, all of which have contributed to a more transparent market and lowered investment standards. The majority of the demand increase may be attributed to NRIs who are located in the region. This is because the value of the dirham is increasing in comparison to the rupee, and Indian nationals residing in the Gulf region are unable to get citizenship.
The luxury real estate market is poised to surpass records this year thanks to a surge in demand and enthusiasm. When building to accommodate the increasing demand for high-end homes, developers are working hard to maintain the industry's high quality standards despite the stiff competition they face. The number of non-resident Indians, or NRIs, investing in Indian real estate has increased in recent years. The country's first-rate transportation system, innovative buildings, plush accommodations, and strategic placement are all major contributors to this trend. Developers that pay attention to these characteristics are predicted to increase the market's attractiveness and income.