In FY22, NRI investment in Indian real estate could increase to $14.9 billion: report!
By: Marston Whaley
Tags: Real Estate Investments

NRI investments in India have gone from strength to strength in recent years, thanks to the positive policies of the regulatory agencies. Non-Residential Indians, according to a report by 360 Realtors, invested $13.3 billion in the Indian property market in FY 21, compared to the earlier estimations of $13.1 billion. The investment volume increased by 6.4% compared with the preceding fiscal year despite the pandemic’s overall market feeling. سيارة

Due to the global lockdown that triggered massive panic, numbers declined by 35 percent in the first quarter. The sharp slowdown in business and economic activities in conjunction with the full-blown medical crisis has greatly influenced NRI investment feelings. In the second quarter, however, the situation improved significantly as several attractive payment plans began to attract NRI buyers. This was also a time when the Government of India’s liquidity infusion contributed to improvising the overall economic climate and lowering the rates of home loans.

Despite initial hiccups, investment quickly recovered

“NRI investments were also forgotten when the lockdown was declared. In the first quarter of the last fiscal year, expat community investment fell by 35% over the same quarter last year. However, developers soon introduced numerous attractive payment plans to build resilience by using the digital medium. The government’s strategy of fighting liquidity infusions, which led to a reduction in household loan rates, set further the stage for rapid recovery. It was also a time when the value of the Indian rupee was lowered and NRI investment continued,” said Ankit Kansal, 360 Realtors’ foundress & MD.

At the end of the second quarter, NRI investment grew by 18% on a Y/Y basis, according to the 360 Realtors report. In the following quarters, rising trends continued with annual NRI investments jumping by 24 percent and 22 percent respectively.

The decrease in the stamping duties in states such as Maharashtra and Karnataka has also helped promote growth.

GCC is still an important source market

GCC continues to be the major source of NRI investments in India, according to the data points shared by the report. GCC accounts for approximately 41% of total investments. Expat community investment inflow in the US accounts for 17% of the total purchase, followed by Singapore (12 percent ). Other major sources include Canada, the United Kingdom, Germany, Kenya and South Africa.

Average ticket size is reduced

One striking feature of the current NRI report by 360 Realtors is an incremental increase in average ticket size. Previous reports suggested a decrease in average ticket sizes. This time, however, after the pandemic, most buyers now opt for larger spaces, which have edged the ticket size.

In FY21, the average US ticket sizes reached 124,000 dollars compared to 111,000 dollars in FY20. The average ticket size from Singapore was up to $93,000, compared with $91,000 in FY 20. Similarly, the average purchase ticket size of UAE-based NRIs increased by 11.5 percent to $97,000.

The momentum is on the rise

Investments of NRI in FY 14 amounted to $6 billion. Since then, they have grown stronger to $13.3 billion in FY 21, which is slightly higher than 12 per cent by a CAGR. In the coming quarters, NRI investments will continue to spiral. The digital pivot is going to be a major game changer. Following the current crisis, both developers and brokers understood the importance of digital assets building across the value chain.

Digital launches, 3D property viewing, concepts of enhanced & virtual reality-based design, virtual property shows and online transactions have finally begun to move out of the boardroom contour and witness a broader application. Besides painting a very positive picture for the industry as a whole, this will give NRI buyers a big boost. The active use of digital technologies bridges the gap and helps expat buyers to look at various property options and learn about them without coming to India and making informed decisions.

The report states that numerous factors play a crucial role in the upward trend. In addition to attractive payment plans and an increasing focus on a tangible asset to decrease risk, the value correction of the Indian rupee also boosts buying. Based on an analysis of regression, the report also suggested that investment will increase by 12 percent to $14.9 billion in FY22.