Update on Investing in Real Estate in India for NRIs

Investing in Indian Real Estate is a perennial topic of interest to Non Resident Indians (NRIs), OCIs, PIOs and others. 

A few months ago, we blogged about the need for streamlined and flexible policies (ref: “NRI investment in real estate: Flexible policies are the need of the hour”). It turns out that things are moving in the right direction. There is a lot happening on the legislative front.

An Article in moneycontrol examines the Impact of RERA on NRIs investing in India property market 

The question now is whether NRIs can be more confident in making an investment decision with policy changes such as RERA and GST attract NRIs to Indian realty in 2017.

The government has largely addressed most of the above concerns by some of the key policy changes introduced in 2016, namely the Real Estate Regulation Act (RERA), the Goods and Services Tax (GST) and the Benami Transaction Act.

RERA or the Real Estate Regulation and Development Act 2016 (RERA) will ensure regulations in this largely unregulated market. The purchaser will be more protected and greater transparency in the sector will be visible. RERA will put accountability on the developers in terms of financial disclosure, timely development of projects and maintaining good corporate governance practices.

The Punjab state government has taken a lead by proposing to set up an ombudsman solely for NRIs. An Article in Times of India says 

“A lot of NRIs face problems either related to their property or other matters. They come to the state only for a short period every year and cannot afford spending long time dealing with legal problems. With the objective to redress their grievances effectively in a time-bound manner, the state is bringing a new legislation to create an Ombudsman for NRI Affairs,” the budget proposal states.

To further connect with Punjabi NRIs, the state government has unveiled “Friends of Punjab-Chief Minister’s Garima Gram Yojna” for the Diaspora.

There is certainly a demand from NRIs. Khaleej times examines how “More NRIs keen to make second property investment”

More NRIs in the UAE are now interested in securing an additional investment back home – there has been a rise of 110 per cent in this segment from 20 per cent last year to 42.12 per cent now.

This was revealed in a survey conducted by the organisers of the upcoming Indian Property Show among 10,000 UAE-based Indian expats.

There is an increase of about 45 per cent in people looking to buy homes in the budget range of Rs5.1 million to Rs7.5 million (Dh290,000 to Dh426,000) from 21 per cent last year to 30.48 per cent this year.

Although Mumbai, Chennai, Bengaluru, Delhi, Hyderabad and Pune remain the top favourite cities among the Indian community here, Kannur, Thrissur and Thiruvananthapuram have emerged as new destinations of interest.

“NRIs are crucial stakeholders of the real estate industry. In 2017, total NRI investment in realty in top eight cities is expected to touch $11.5 billion [Dh42.20 billion]. This will represent 20 per cent of the total market share, currently estimated at $60 billion [Dh220 billion],” said R. Srividya, general manager of corporate sales and brand engagement, Indian Property Show, Sumansa Exhibitions.

Endnote: You may also be interested in GaramChai.com section on NRI Real Estate

Observations of an absentee landlord in America

Indian Americans, NRIs and Indians in America may need to relocate for work or other family reasons.

Perhaps the biggest challenge facing those relocating: what to do with my house; Sell or rent? While selling one’s house is an option, some people might opt to retain the property and continue to build equity on it. In addition to equity, one can generate rental income that will compensate for the expenses. Absentee landlords generally engage the services of a trustworthy local property manager who can manage one’s property remotely.

Many NRIs also opt to retain their property in the US even after moving back to India and might rent it out via a property manager.

Greensboro

In a new section of GaramChai.com (link),  we present a first-hand account of an absentee landlord in America. Absentee landlord is an economic term for a person who owns and rents out a profit-earning property, but does not live within the property’s local economic region.

NRI investments in housing set to almost double to $11.5 billion this year from 2013 level: Report

“It is believed that the new change in government has infused new sense of confidence about the prospects of Indian economy,” said Kanika Gupta Shori, COO and co-founder, Square Yards.


Also check out?NRI Q&A: Is investing in land in India by NRIs a good and logical decision?


The Narendra Modi-led government has given a significant boost to the confidence of the non-resident Indians (NRIs), with their investment into the primary residential real estate market expected to almost double this year.

About $11.5 billion of investment by NRIs is expected to come in the new home or primary residential market across top 8 major cities in 2017, against $6 billion in 2013, according to a report by real estate transaction platform Square Yards.

“It is believed that the new change in government has infused new sense of confidence about the prospects of Indian economy,” said Kanika Gupta Shori, COO and co-founder, Square Yards.

Over 20% of NRI investment in Indian real estate comes from the United Arab Emirates (UAE), followed by other major NRI populated countries such as the USA and the Kingdom of Saudi Arabia. Other countries such as Canada, the UK, Singapore & Australia also source of substantial NRI capital inflow in Indian realty.

“A depreciating Rupee against the dollar and other currencies have added further impetus to the rise of momentum of NRI investment into the Indian real estate,” she said.

Read rest of the article on Economic Times Reality