Record Growth Driven by Economic Optimism and Rising Demand

In a notable shift, investments by non-resident Indians (NRIs) in the Indian real estate market have surged over the past 20 months, reflecting a growth rate of 15-20%. Industry experts predict that NRIs’ share of total investments in the sector could rise to 20%, up from the previous 10-15%. In 2023 alone, NRIs poured over $13 billion into real estate, with expectations of continued growth by 2025.

NRIs: A Key Player in Real Estate Sales

According to Saurabh Runwal, Associate Director at Runwal, NRIs now represent a significant portion of sales in the market. Santhosh Kumar, Vice-Chairman of Anarock Group, notes that NRIs account for 10-15% of total sales each quarter. Their increasing presence is fueled by optimism in the Indian economy, stricter compliance regulations under the RERA, and rising property values.

Shifting Preferences and Investment Strategies

Recent data from Anarock indicates a 15-20% increase in NRI demand in 2023 compared to 2022, with similar trends continuing into the first half of 2024. Runwal reports that NRIs comprise 8-10% of sales for his company, particularly favoring township projects, mixed-use developments, and luxury apartments in Mumbai.

Bhavik Bhandari, Chief Sales & Marketing Officer of Ashwin Sheth Group, emphasizes that NRIs prefer investing in reputable brands with a strong track record, benefiting from increased transparency and disclosure among developers.

A Dual Motivation: Investment and Relocation

The growing prospects of the Indian economy are not only attracting investment but also prompting some NRIs to return and settle in India. Kumar highlights that NRIs are motivated by the desire to ensure financial stability for family members back home and take advantage of a depreciating rupee, which enhances currency gains when repatriating funds.

Trends in Property Preferences

Anarock reports that most NRIs are targeting properties priced over ₹90 lakh, with half of these purchases falling between ₹90 lakh and ₹1.5 crore. A fifth of investments are in the ₹1.5-2.5 crore range, while a smaller segment is purchasing properties above ₹2.5 crore. This trend indicates a growing preference for larger, more luxurious homes that offer privacy and exclusive amenities.

A Shift Toward Luxury Living

Runwal notes a clear trend of NRIs increasingly opting for larger homes, such as sky villas and penthouses, reflecting their desire for comfort and prestige. As more reputable builders enter the plotted development segment, NRIs are diversifying their investments further.

As the Indian real estate market continues to evolve, the significant contributions from NRIs are poised to reshape the landscape, making it a pivotal time for both investors and developers.