NRI
Capital has practically changed the landscape of real estate sector growth in
India. Today, real estate sector is one of the largest employers in India,
because of funds being pumped into the market by NRI’s.
Why
it works for NRI’s, irrespective of factors such as demonetization, is rather
simple to understand. The conversion from USD to INR makes it easy and
affordable to invest here. Add to it the economic opportunities giving rise to
a new real estate (potential) in India; many more NRI’s can be seen jumping to
the foray. They are all familiar with the Indian terrain, and are mostly, correct
visionaries.
Another
feature is NRI investment in their native land, the place to which they belong
originally. This one is not for commercial interest (you cannot even invest in
agricultural land, farm house, or plantation property), but preference given to
nostalgia.
If
we look closely at this one aspect, mostly it is local destinations including, Delhi-NCR,
Chandigarh, Ahmedabad, Mumbai, Kolkata, Bangalore, Hyderabad, and Dehradun,
driving the NRI investment trend.
Other Indian cities
preferred by NRI’s
Giving
an impetus to real estate investment (subject to NRI funds) is demonetization
and implementation of real estate regulatory act. It brings in transparency,
and with the present government taking steps to reduce red tapism & bureaucracy
(categorized), the business climate in India is friendly.
Take
for consideration, the GIFT city in Gujarat, which is expected to change the
business DNA of the state. The international exchange set up in Gujarat has created
a huge curiosity in the business community, and is expected to change the
social infrastructure of the state.
Another
major initiative of the Modi-led government is smart cities budgeting. In the
initial phase, 20 cities including Delhi-NCR, Mumbai, Pune, Bengaluru, Kolkata,
Hyderabad, Ahmedabad and Chennai, are ready for some glaring work in their
social and economic infrastructure. This single factor has the potential to
raise quantum of NRI investment significantly.
Further
urban planning like smart corridors, is also expected to impact small towns
included in the smart cities planning, as well locations which directly benefit
with improved connectivity. With increased work productivity, the standard of
living is going to improve, and therefore, investment in real estate. Featured
destinations on the urban development map are Uttar Pradesh, Mumbai, Guwahati, Ahmedabad,
or Jaipur, among others.
We
also need to take micro-market factors into close consideration. For example,
an NRI belonging to Chennai is keen to invest in Coimbatore, which is a befitting
option as far as affordable living is concerned. Coimbatore enjoys good
connectivity to Chennai, due to the rapid expansion of state infrastructure and
transportation, therefore, giving NRIs a smart choice.
In
fact, Coimbatore has also witnessed huge influx of engineers, and growth in automobile
parts manufacturing and IT/ITeS industries, improving living standards in
the city. Similarly, if we look at Bangalore, a city reeling under pressure of
increased occupancy, IT workforce is seen shifting job site to Pune, a
cosmopolitan city and an accommodating living space.
Even
holiday destinations like Goa and Jaipur have seen a rise in NRI capital
investment, as these are huge tourism markets of India.
So,
there are many factors affecting NRI capital in realty sector in India. The
bottom line is; urban cities like Delhi, Mumbai, Bangalore, will continue to be
the hotspots, but sooner or later a transformation of sorts is required to
better the NRI investment. Alternatively, there are emerging markets, which
will rise to point of attracting greater NRI fund participation. Overall, it is
a favorable time for India Housing NRI Capital growth.
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