The investment by NRIs (Non-Resident Indians) and NRGs (Non-Resident Gujaratis) in Ahmedabad realty has fallen by 25 to 30 per cent in the post-Covid period. According to experts, the uncertainty during the pandemic has put the Gujarati diaspora in wait-and-watch mode.
“Besides post Covid restriction on travel to India, NRGs/NRIs are looking into the US realty market as it has already picked up traction and offers better returns,” Ashil Patel, partner at Savannah Realty LLP that holds a franchise of international realty firm Re/Max, was quoted as saying while commenting on the thread.
“This would have affected around 30 per cent NRI/NRG investment in Ahmedabad as their role has been significant in growth of the realty market here,” he added.
Several investors have shown interest in residential projects in the US.
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Bipan Patel, a businessman from Ahmedabad who’s settled in the US at present, said, “We are thinking of withdrawing our investment from Ahmedabad as the realty market there looks stagnant. The US market is offering better opportunities at present. Depreciation of Indian Rupee is another factor for lack of interest by NRIs.”
“Looking at the current market scenario in India and the way US realty market is growing, we aren’t sure if we want to invest in Gujarat at this point of time,” said Kajal Patel, a real estate consultant in the US and investor, adding, “The elder generation who have their roots in Ahmedabad may be interested to continue their investment there but the current generation doesn’t want to get into any hassle of managing the properties, staying far off.”
According to some realty experts, however, the phase is only temporary and is likely to pass in the next six months.
Kamal Chandani, Gujarat Head of PropTiger, a national realty firm, said, “We expect revival in buying interest from the NRI/NRG community by the end of this year. We expect a huge inflow of funds from the US and UK into the Ahmedabad realty sector.”
“Covid led to lots of layoffs not only in India but also in countries like the US and UK. No doubt, NRIs/NRGs are holding their funds for contingencies. But based on the inquiries, it looks like residential properties with ticket size between Rs 50 lakh and Rs 1 crore may remain favourite for investment,” Chandani added.
Similarly, CEO — GCC, ANAROCK property consultants Shajai Jacob said, “Job losses and generalised uncertainty about the future affected NRIs as much as it did resident Indians. Cash conservation, extreme risk aversion and inability to travel were among the main reasons why NRI investments into Indian realty have reduced.”
“However, in the midst of the first wave, the extreme sentiment downturn reversed and house buying activity picked up considerably again. NRIs were, and continue to be, active participants in this sentiment revival. The desire to own a home in their country of origin transcends mere exchange rate variations,” Jacob added.