Amid Covid chaos, NRIs rush to buy homes in India

MUMBAI | BENGALURU: The global Indian is coming home — to a grand reception from home sellers.

NRIs are scooping up properties in India with unprecedented enthusiasm. And the reasons aren’t far to seek: Record low borrowing costs, stamp duty cuts in key markets, and the anxiety stoked by the pandemic. Attractive offers and product discounts, to use a cliché, have acted as the icing on the cake.

Additional tailwinds are a weaker currency and a confidence-boosting regulatory environment after India implemented the Real Estate (Regulation & Development) Act, 2016.

“The Covid-19 outbreak has made people realise the importance of owning a tangible physical asset. NRIs have demonstrated a keen appetite to get in on this action, both as investors and potential homebuyers,” said Vikas Chaturvedi, CEO, Xanadu Realty. “Most enquiries are originating from Europe and the Gulf region. We have seen 8-10% rise in residential sales to NRIs.”

Proptech platform Square Yards has also seen an 82% sequential jump in NRI transactions in the December quarter, taking the year-to-date performance to 1,510 deals across the country.

The gross transaction value for these deals rose 67% from a year ago to Rs 817 crore. Reduction in stamp duty for a limited period in major states, such as Maharashtra and Karnataka, helped conclude deals. “With home loans rates being at its decadal low and several regions announcing a reduction in the stamp duty, it has caught NRIs’ attention,” said Ashish R Puravankara, MD, Puravankara. “These deductions impact the projects’ final costing, making them more appealing and lucrative for NRI home buyers and investors… We expect the sales momentum to continue not only for the next quarter but also in the next financial year.”

Despite the lockdown affecting the first quarter of FY21, Puravankara has witnessed around 20% on-year rise in NRI sales for the six months ending September. “Around 15% of our overall sales in the last two quarters came from the NRI segment and most of it has originated from West Asia, the US, and Africa. The demand for both ready to move in apartments and new launches has been robust across our projects in Mumbai,” said Bhaskar Jain, head of sales, the Wadhwa Group.

While NRIs have always invested in the Indian property market, completion delays and consumer activism over the last few years dented their enthusiasm. But a stronger regulatory framework has given them the confidence to reach out for their cheque books.

This trend is expected to gain greater momentum with the launch of innovative real estate offerings, such as branded land. According to Chaturvedi, with a completely digitized buying process, investing in branded plots has been attracting investors, ensuring transparency on approvals and paperwork.

For NRIs, even registration of land is done remotely, giving them a hassle-free experience and a possibility of price appreciation.

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