NRI Investment in Indian Real Estate

You may take out Indian from India, but you cannot take India from Indians and that’s the reason no matter where the Indian community stays, they generally prefer to have an abode in their home country. But there is something more, which is driving the community to invest in the Indian property market. Recent surveys indicate that the interest of NRIs in the Indian property market has surged by 35%. Captured below are some of the factors which are stimulating the interest of NRIs in the Indian Realty sector.

Sound Investment Sentiments: With a stable government coming to power last year, there is a positive sentiment in the Indian market. Such sentiments are reflecting in the property market as well with an anticipated 10-15% rise in the housing units to be sold in 2015. Likewise promising returns are expected in the mid to long term.

Easy Regulatory Principles: The overall regulations in India are conducive for the acquisition of land by NRI and PIOs (Person of Indian Origin). NRIs and PIOs are allowed to acquire any number of residential and commercial properties other than agricultural land without any prior permission.

Depreciating Rupee: Notwithstanding the positive sentiments in the economy, rupee is depreciating at the moment. Paradoxically, this results in increase in NRI investment in India. Earlier there used to be increased tendency to invest in financial instruments such as Non-Resident External (NRE) and Foreign Currency Non Resident (FCNR) to capitalize on volatile rupee. However, research indicates that such investments have been erroneous at times. In this regard, the Indian property market offers an optimal avenue to invest.

REITs: The Real Estate Investment Trust (REIT) will be one of the game changers in the overall real estate investment landscape. The investment instrument which is similar to mutual funds, will offer safe and sound investment opportunities for the NRI segment.

It should be noted that NRI investments do have few challenges. Sound investment strategies need ample understanding of the local market dynamics along with proficient knowledge on expected Return on Investment (ROI) and financing possibilities.

In such situation of knowledge gap, Kin Housing with its in-depth understanding of the Indian Property markets and the financing instruments can be of help. We understand what one really needs during making an investment decision. Over the last one year, we have successfully served a range of NRI client with their investment needs.

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