2024: Is it a Good Time for NRIs to Invest in the Indian Real Estate Market?

Traditionally, real estate has always been a safe investment compared to other investments, and currently, the Indian real estate industry is at the pinnacle of success. This sector has become a hot favourite for investments for NRIs. Today, they have an option of investing not only in industries such as the manufacturing of medicinal drugs, EVs, IT, hotels, etc., but also in commercial and residential real estate industries.

NRIs are generally well informed and educated people who ensure that they invest in areas that offer great returns. Post the pandemic, NRIs have mainly focused on acquiring properties in India for residential purposes. The digital landscape has made it easy for anyone anywhere across the globe to analyse and decide on credible builders. Many reputed builders in India have been consistent in their project development and timely deliveries. Builders like Adani Realty have earned the reputation for providing the best-in-class real estate properties in commercial and residential segments. The success stories of the Adani Group have further made the decision-making of NRIs in investing in Indian real estate easy and safe.

Reasons for Investment in Indian Real Estate

There were apprehensions about the future of India’s foreign investments due to the pandemic. However, as the pandemic abated, Indian real estate builders started conceiving and building new projects for residential and commercial purposes. Projects such as The North Park, La Marina, and Water Lily in Ahmedabad by Adani Realty are fit to attract a lot of NRIs and high net-worth individuals (HNI) to invest. There are some choicest luxury properties available in Mumbai, Pune and Gurugram. Many real estate developers are trying to build residential and commercial properties in close proximity. This is an excellent option for many to save on travel between home and office.

Indian Rupee vs US Dollar effect

The Indian rupee has been falling against the US dollar. This has suddenly opened an enormous opportunity for NRIs to divert their funds to invest in Indian real estate in 2022. Buying properties in India has become more affordable. The falling INR value has motivated NRIs to invest more in properties in India. They can buy luxurious homes or apartments that are widely available across the country.

Low returns on other investments

Traditionally, NRIs invested in gold, fixed deposits, and the equity market. Banks have never been a good option for investment. However, all this changed after the COVID-19 pandemic. Return on investment from banks is meagre, and the gold and equity market has been volatile. The only investment that shows a promising future and offers the best returns in the Indian real estate market.

Indexation benefits with simplified taxation

India's policy changes in terms of taxation have encouraged NRIs to focus on investing in India rather than in the country of their residence or other countries. NRIs could thus invest their surplus money in Indian real estate. Properties held by NRIs for more than 24 months are treated as long-term immovable assets. The Income Tax Act of India allows certain tax deductions under Sections 80C and 80TTA.

Another major benefit to NRIs is that they can transfer the money to the Non-Resident Ordinary Account (NRO) and subsequently credit it to a seller's or builder's bank account while purchasing a property. The NRI investor can also transfer the money directly to the seller's account while buying a property in India. Therefore, NRIs can invest in the Indian real estate market without hurdles with a defined documents checklist. This has opened more avenues for NRIs to invest in the Indian real estate industry for personal and commercial properties.

Luxury Real Estate for NRIs

In the past, only the elite could buy luxury residential properties in India. But after the industrial revolution, India has seen a remarkable transformation. Today, many Indian businesspeople are among the richest people in the world. Similarly, India has also produced many top executives who hold strategic positions in some of the top Fortune 500 companies in the world.

NRIs and HNIs (high net-worth individuals) who have been on the lookout for luxury residential properties have appreciated the development of luxury housing in India. The work-from-home (WFH) trend due to the pandemic has particularly inspired builders to develop world-class luxury properties such as independent houses, apartments and farmhouses. NRIs have loved this concept of having a luxury second home in India for their personal use. Properties designed on the principles of Indian architecture with a central courtyard reflect the Indian tradition that has been loved by one and all for centuries.

NRIs are interested in investing in spacious residential houses that offer open, green, and modern amenities. These include temperature-controlled swimming pools, private golf courses, ultra-luxurious rooms, private terraces, landscaped courtyards, and other facilities that have become common and basic in all gated residential townships. Significantly, world-renowned Indian architects who have been in demand in the Middle East and other countries are designing these properties.

There were uncertainties and apprehensions during the Covid-19 pandemic about the future of the real estate business. However, the Indian real estate industry has shown resilience in overcoming these uncertainties. The construction workers have returned to their work, and with most Indians vaccinated, the process of building is back on track.

The Indian real estate sector is currently a favourite investment option for NRIs who are contemplating investing more in residential properties in 2022. It is indeed an excellent time for such investments in India. It is essential to do basic research to identify reliable and credible reality developers in India.

Residential Projects in Gurugram

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