Indian real estate sector is bracing itself for a brighter year ahead as demand in realty sector recovers slowly. When the year 2013 was a forgettable year for the Indian real estate sector as a whole due to the rising inflation and high borrowing costs, the Non Resident Indians (NRIs) took the center-stage taking advantage of the devaluation of the Indian Rupee as compared to the US Dollar. This market condition has made sure that Non Resident Indians (NRIs) are now driving the market sentiments and builders are serving them keeping all their needs in mind.
Let us take a look at how the year is likely to pan out for non-resident Indian investments in the realty sector.
More concentration for Non Resident Indians (NRIs):
To balance the sluggishness in local markets, real estate developers are now concentrating more on projects for the Non Resident Indian (NRI) segment exclusively. This includes more concentration on luxury amenities and green living, aiming at Non Resident Indians (NRIs) who wish to maintain the same international standard of living.
Non Resident Indians (NRIs) bypassing lucrative traps:
One positive development in recent times has been the awareness amongst non residential Indians helping them avoid the booby trap for Non Resident Indian (NRI) centric projects. A lot of builders and realty developers have been guilty of marketing their projects as custom built for the Non Resident Indians (NRIs) in the past. Non Resident Indians (NRIs) have made a lot of sentiment driven investments in such projects only to rue the long delays. So much so that some investments even turned potentially deprecating for the investing Non Resident Indians (NRIs). The positive real estate trend for Non Resident Indians (NRIs) is the increased awareness about the manipulative marketing strategies adopted by realty developers in the past.
Tier II and Tier III cities attracting more investment:
Moving over the old cliché that most Non Resident Indians (NRIs) had, thinking foreign-earned savings would make it simple to find a luxurious home in India when they return, Non Resident Indians (NRIs) are now investing early. Most Non Resident Indians (NRIs) have moved on from investing in metropolitan cities to smaller tier II and tier III cities. Needless to say the rising demand in smaller towns has made real estate developers focus their energies on luxurious home segment in smaller towns. Non Resident Indians (NRIs) are no longer investing in properties as a back-up base when they return but also investing in real estate segment as an investment opportunity. The smaller towns and cities offer immense potential and opportunities for such investments.
Clarity of Regulations:
Although Non Resident Indians (NRIs) have a natural affinity towards their homeland, potential lack of clarity on regulations and legal issues usually act as a deterrent from bringing in higher investments. The Reserve Bank of India (RBI) on its part has streamlined various rules and regulations for Non Resident Indians (NRIs) seeking to invest in the Indian real estate sector. Non Resident Indians (NRIs) have no restrictions on the number of commercial or residential properties they can own in India with only a limit on repatriation of more than two unit sale proceeds. Mortgage of residential property no longer requires any pre-approval from Reserve Bank of India (RBI) while renting is made easy with rents allowed to be credited to Non Resident External (NRE) accounts or remitted overseas
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