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A popular saying goes ‘there’s no time like now. It holds true for India’s present real estate scenario with a prod to all those fence-sitting home-seekers out there. And if you are an NRI looking to get that piece of prized property back in your home country, this is a good time to go the whole hog. Because the real estate market in India has never looked so lucrative in a few decades than now!
The emotional bond
That tug at the heartstrings is what NRIs all over the world experience at some phase in their life. The homeland’s call and desire to own a slice of their motherland prompts a large segment of NRIs to invest in prime property back home.
The COVID-19 pandemic has increased NRIs’ emotional association of long-term security with physical assets. 63% of the polled NRIs state this as their reason for buying homes in India now. They are also driven by the uncertainties posed by COVID-19.
Manjusrii Manilal, Head of Sales and Marketing, HM Constructions believes that “Luxury properties have emerged as a hot favourite with NRIs because of the depreciating rupee value translating into greater buying power, coupled with ongoing developer discounts and offers. A majority of NRIs is buying for eventual end-use, not just as investments,” she shares.
Lowest interest rates
Just because you are an NRI it doesn’t require you to spend all your life’s savings on a home in India. However, even if you desire to buy a house over the counter, you will be spoiled for choice with a surfeit of ready to move in luxury homes to satiate your requirement.
If you plan to buy a luxury abode with a housing loan, this is the best time to pitch your application, because home loan interest rates are presently at their decadal lowest. Some retail banks are offering a housing loan at a sweet 6.5%. And if you have an NRE (non-resident external) bank account, it’s even better since you can also apply for the housing loan online. NRIs are eligible for a housing loan amount of up to 80% of the property value. If you have a distinct rapport with your bank you could be disbursed around 90%.
Having an NRE account also means that you have the advantage of repatriating the capital invested in the property when you sell it in the future.
What suits NRIs best
There’s no doubt that the uber-rich NRI segment has an elevated elegant lifestyle they are used to living abroad. They do not want to cut corners or want a smaller home. They are willing to pay the luxury price tag too because they know they can enjoy the same uber lifestyle back home with the same international amenities and sophistication.
As per ANAROCK’s consumer survey, at least 73% of NRIs now prefer properties priced between INR 90 lakh to INR 2.5 Cr. Their choice is no smaller than 3 and 4 BHK luxurious homes. In the pre-COVID survey (H2 2019), just 41% preferred properties within this price bracket – most favoured affordable and mid-segment homes.
The IT hubs of Bengaluru (24%) and Pune (19%) are seeing the highest NRI demand. Collectively, these two cities saw approx. 48,370 homes sold in 2020 – accounting for a 35% sales share among the top 7 cities.
Hot demand for Ready to Move-In (RTM)
According to the survey, at least 67% of the polled NRIs are looking for ready-to-move-in homes. If we consider the overall survey trends (including NRIs and resident Indians) just 29% preferred to buy RTM homes, with another 27% of respondents preferring under-construction properties that will be delivered within a year.
A few pointers to note
- NRIs are looking to make the most of the prevailing market conditions in India, including discounts, offers and lowest-best home loan rates.
- A large segment of NRIs will only consider properties by branded developers who have the highest project completion capabilities, resulting in the lowest execution risk. Another reason for this choice is NRIs’ desire to buy into projects with international-grade amenities.
- According to the Anarock survey, most of the polled NRIs seeking property in India are aged between 35-45 years of age. Among all NRI respondents who participated in the survey, close to 68% considered real estate as the best asset class for them at this time.
- Over the long term (i.e. in 5 years), 92% of NRI respondents think prices will increase.
- “A segment of NRIs are looking for ‘upcoming jet-set locations’, which we project will be the go-to locations in the coming years,” says Rahul Pai, co-founder and joint MD, PropertyAngel. These are HSR/SarjapurRoad, Hosur Road, Whitefield, Hebbal, Mysore Road, Peenya-Dasarahalli, and Kanakpura Road.
Pai sums it up by saying, that it is true that across Bengaluru the prices of the properties are way above their par values and if you have to buy them you have to pay some premium on their intrinsic value. And there’s no doubt that prices of properties and residential houses in these areas are not about to see some downtrend at least in the coming years. And it’s quite apparent that because of its Silicon Valley tag, Bengaluru will attract and produce more millionaires and billionaires in the coming years and because of it, it is quite obvious that these wealthy individuals will not be shy to spend extravagantly for their homes.
Call us on 8880225555 and we will help you find a home that suits your lifestyle, falls within your budget and is close to all that you would need throughout the year!