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NRIs Set to Shape India's Real Estate Landscape
Source: livemint.com
The contribution of Non-Resident Indians (NRIs) to the Indian real estate sector has risen significantly, with their investments steadily rising over the past five years
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 20 percent of the Indian real estate market.
Key Highlights of NRI Real Estate Report 2023
Top Investment Destinations:
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 20 percent of the Indian real estate market.
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.
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.
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.
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.
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 20 percent by 2024.