The rupee’s depreciation versus the dollar, along with the geopolitical scenario and rising global interest rates, is endearing real estate to non-resident Indians.
NRI demand for realty is increasing across the board, from mid-income projects to premium and luxury sectors, as well as planned developments. So far in 2022, the Indian rupee has fallen by 5.2 % versus the US dollar.
“The global economic situation has presented a number of obstacles, but India emerges as a safe haven in terms of economic growth potential,” said Niranjan Hiranandani, vice chairman of real estate trade association NAREDCO and managing director of the Hiranandani Group. “Indian real estate is a strong wealth development and growth choice for NRIs, beyond mere feelings,” he said further.
According to him, the current global currency scenario allows NRIs to purchase more square feet of Indian real estate.
Apart from providing a fair amount of safety in these turbulent times, Indian real estate offers capital growth and rental income as well. All of these factors, as well as the digitization of procedures, add up to a win-win situation for investors.
Many developers, particularly the major ones, have seen an increase in the number of inquiries and conversions into real home sales in the recent few months.
“NRIs might take advantage of the falling rupee by investing in residential real estate in India. This is supported by an increase in inquiries from various areas, particularly the Middle East. We’re witnessing more and more demands driven by their worldwide expertise and exposure,” K Raheja Corp Homes’ chief executive Ramesh Ranganathan said.
The UAE and Saudi Arabia, two Middle Eastern nations with sizable Indian populations, peg their currencies to the dollar. This signifies that the rupee has depreciated at the same rate as the dollar.
Apart from domestic purchasers, premium properties in tier I and metropolitan areas like Mumbai, Delhi-NCR, Bengaluru, and Pune, as well as beautiful sites in hill stations and near the seaside across India, have been attracting increasing attention from NRIs, especially since the epidemic.
“NRIs in the Gulf, which has traditionally been a strong market for us, is showing a lot of interest. In addition, we’re seeing a lot of interest in Singapore and Hong Kong. Apart from London, NRIs in these markets (Malta) have accounted for over 30% of our business so far this year,” said Dhimaan Shah, founder and chief operating officer of the Isprava Group, a luxury vacation house developer.
When the rupee declined in the past, NRIs chose real estate as a smart investment back home since it gives them more purchasing power in India.
Property has been the most sought-after asset in this category, particularly by Gulf residents planning to return to their home country after retirement. However, demand and inquiries from other foreign markets have begun to increase, in addition to the UAE.
The government’s sequence of changes, particularly the Real Estate (Regulation & Development) Act of 2016, have bolstered NRI investors’ trust, and they are increasingly inclined to buy properties in India.
“The global Indian recognizes the value of having a home away from home. The regulatory framework, as well as improved digitalization, have contributed to making it more appealing and stable for them,” Hiranandani added.
NRIs are also flocking to the country to invest because of the expected price increases in residential property as a result of increased demand.
While the US currency remains strong versus the rupee, Indian real estate has been booming, with high sales in all major markets.
As seen by recent quarterly revenues that have surpassed multi-year highs, a strong demand conversion undercurrent is pushing sales of both public and private real estate developers.
