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Why it is the best time for NRIs to invest in Indian real estate ?

The Covid pandemic has took its toll in India’s foreign exchange income as NRIs are cautious on the changing job markets and uncertainty at work places owing to the Covid pandemic.NRIs send more than 70 billion US dollars annually to India-the largest figure of repatriation money around the globe.Much of these money goes to the real estate sector, which due to the same reason is experiencing a slumber now.

But considering various aspects which had skipped the eyes of investors,these challenging times are the best to make solid investments in the real estate sector.We shall evaluate 5 of these aspects linked to the real estate industry.

Security of buying a home in India:

India has a reputation in the world in dealing with market fluctuations and health crises. The country has stood firm during the previous global recessions of 2001 and 2008 with little impact on the economy. Investing in a property in India is therefore a safe bet for most NRIs in terms of good return on investment and the security of the Indian market in tough situations.

Further, watershed reforms taken in the last few years by the government such as RERA, GST, & other measures to cleanse the real estate sector have instilled a sense of confidence among NRI investors towards the Indian real estate market and increased transparency also. Controlled inflation and speculation free market provide an opportune value to NRI investors and buyers to invest in the real estate market.

Repo rate slashed:

The reduction in repo rate by a cumulative 115 basis points so far this year to 4 per cent comes as a good tiding for the real estate sector. With home loan interest rates getting cheaper, it gives a convincing reason for fence-sitters to take the plunge into the real estate market. When we look at historical data of repo rates, in the year 2000, repo rate was at its peak at 13.5 per cent and in 2020 it’s nosedived to 4 per cent. It is always considered that the reduction in repo rate is inversely proportional to real estate growth. NRIs looking to invest in Indian real estate can make merry as this move will reduce borrowing costs and facilitate the easy availability of loans.

Plummeting ticket prices:

Affordability in Indian real estate is starkly visible with real estate ticket prices taking a tumble in various segments of real estate. NRIs can take this as a best opportunity to invest in real estate in India. The long-cherished dream of owning a home back in their home country can be easily fulfilled in the present situation. Many real estate experts and consulting firms in India are expecting a 10-20 per cent correction in the prices of luxury properties (Rs25 million and above) depending on the location, city, and demand-supply situation. In the mid-segment, property price between Rs10 million to Rs15 million might witness a slight correction and the affordable segment may register a moderate price reduction of 5 per cent.

Flexible attractive payment plans:

To allay the fear of NRIs looking to invest in the property sector in India, several real estate developers are dishing out flexible payment plans to prevent any big dents to the pockets of homebuyers. Godrej, for instance, has unveiled a 10:90 payment plan where potential home-buyers have to fork out just 10 per cent of the total cost of the project to book a home. Deferred payment schemes like 10:90 payment option have empowered home-buyers and investors to reconsider investments in other avenues and veer towards real estate. The flexible payment plans could help NRI investors & homebuyers to save 5-6 percent of the total amount of the property.

Depreciating rupee:

The rupee has gone into a downward spiral in the wake of the COVID crisis due to slowing economies and geopolitical tensions raging across the world. The value of rupee against dollar hit a historic low of Rs76.8, before gaining some lost ground. This development can tickle the expectations of NRIs who were waiting for a favourable opportunity to pour money in real estate. As the economy faces the pressures of a recession ahead, the rupee might witness a further dip in its value.The correction in Indian rupee value could help NRIs to save around 8-10 per cent while investing/buying property. It is thus an appropriate time for NRIs to leverage on rupee depreciation and invest in real estate.


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