NRI contributions to Indian real estate surge over five years, to reach 17% by 2025

Between 2019 and 2020, NRIs constituted around 10 percent of the total real estate investments in India. However, this figure has consistently increased, reaching 15 percent today, as per the survey report. It further projects that by 2025, NRIs are expected to contribute to 17 percent of the Indian real estate market.

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“This surge is chiefly driven by a confluence of factors such as increased rental yield, the continued depreciation of the Indian rupee, favourable government policies, and the resilience shown by the Indian real estate sector in the face of adversity. These investments are not solely motivated by financial considerations but are also deeply influenced by the emotional bonds that NRIs maintain with their country of origin,” said Saurabh Garg, Co-founder and Chief Business Officer at NoBroker.com.

Key Highlights of NRI Real Estate Report 2023

Top Investment Destinations: Bangalore and Mumbai have emerged as preferred destinations for NRI buyers due to factors like a cosmopolitan lifestyle, thriving startup ecosystems, and dynamic real estate markets. In fact, Bangalore is the top pick for 29 percent of NRI investors, closely followed by Mumbai, preferred by 24 percent of NRI buyers.

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Shift in Demand: Demand for 3BHK units has surpassed that for 1BHK and 2BHK units, reflecting the preference for more spacious living spaces. The demand for holiday homes has also increased in the past year, with property management services gaining ground.

High-Value Investments: Interestingly, 26 percent of NRI buyers seek properties with budgets exceeding ₹1 crore, indicating a growing focus on premium and luxury real estate options. Besides this, 40 percent of NRIs said they are aligning their real estate aspirations with budgets exceeding ₹1 crore. Further, 54 percent of respondents show a strong inclination towards investing in gated communities for safety and convenience.

Challenges faced: The lack of information and transparency is a major concern for 82 percent of NRI buyers, highlighting the need for improved accessibility and clarity in the property purchase process.

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Property Management Services: A total of 52 percent of NRI property owners express a desire for property management services to oversee their real estate investments effectively.

Sentiment Analysis

Emotional Connection: Over 60 percent of NRI buyers are looking to purchase property for self-use, showcasing their emotional connection and sense of security in India.

Family Focus: 43 percent of NRIs are buying property for their family living in India, and senior living projects are gaining prominence as they offer comprehensive care and comfort.

Digital Shift: 46 percent of NRIs are using real estate websites for property searches.

Builder’s Credibility: Over 55 percent of respondents consider the credibility of the builder crucial in their investment decisions.

Challenges Faced by NRI Property Owners

Property Management: Managing rental properties remotely is challenging for NRIs, with 63 percent identifying property management as a significant challenge. And 52 percent express the need for professional assistance.

Navigating Property Search: 82% percent of the respondents face challenges in obtaining accurate information and investment advice, emphasizing the need for greater transparency and comprehensive data.

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Outlook

NRIs’ interest in Indian real estate has grown due to emotional connections and investment opportunities, aided by technology and increased rental yields. Further, technology has made buying, selling, and managing properties easier, reducing reliance on third parties and promoting transparency. On the whole, demand for property management services is on the rise, providing NRIs with hassle-free property management.

In terms of investment potential, real estate thus remains a promising investment vehicle, with the NRI residential sales growing from 11 percent to 15 percent and expected to reach 17 percent by 2024.

“Being a tangible asset, real estate can generate a wide range of income streams while simultaneously appreciating in value. Returns are directly proportional to the time you stay invested. As per a survey conducted by NoBroker, real estate is a relatively safer investment option than other assets like stock markets and crypto. Stocks and bitcoin are too unpredictable in uncertain market conditions such as the pandemic, inflation, and recession. Besides that, they are not everybody’s cup of tea. Conversely, real estate has demonstrated a track record of consistent growth over the past few decades, positioning it as a stable and dependable investment choice for those seeking long-term financial security,” Garg added.

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Updated: 08 Nov 2023, 02:46 PM IST