Covid-19: A blessing in disguise for Indian realty sector

Although the outbreak of Covid-19 has had a deep impact on the realty market in India, but at the same time NRIs are increasingly shifting their choice to buy properties in India. With thousands of international brands now looking at India over China as their preferred destination for production and business, going forward, India is gearing up for some major influx of global investments, that will have an impact across various industries, directly or indirectly. In the current scenario, while many are considering moving their bases back to India to be a part of this growth story, some purely want to invest in their home cities, to feel a sense of security. As per a leading real estate advisory firm, NRI investments in India will hit an all time high of $13.1 billion in FY 21. Over the years, this cluster with higher disposable income compared to local buyers has become an important driving factor of the real estate market in India. With the dollar gaining strength against the rupee, a competitive marketplace with negotiations tougher than ever, and a sense of moving back to the homeland, being some of the reasons, developers have experienced a sudden spike in enquires from international buyers, even while the industry faces the toughest quarter in the past two decades.

Time and again, the real estate industry has proven to be an attractive asset class with healthier relative returns, and with improved affordability in the current scenario, it has gained attention of both locals and NRIs across the world. Since the establishment of RERA, international buyers have gained confidence to invest in India through a more transparent format of engagement, with reliable developers and properties that are registered under RERA, which secures their investment. UAE, USA, UK, and Canada are the biggest source of NRI investment in India, with 42% of the total inflow coming from GCC alone. As per the Ministry of External affairs, nearly 8.9 out of 12 + million Indians living abroad are based in West Asia, of which there are 3.3 million in the UAE, 2.6 million in Saudi Arabia, and 2.9 million in Kuwait, Oman, Qatar and Bahrain. GCC contributes close to $40 billion annually as international remittance to India. Even after having spent a significant part of their work life in these countries, citizenship is not an option available to the Indians based in the Gulf region, which brings them back to India when it comes to investing in assets like a house. Also, with the dirham gaining value against the rupee, NRI enquiries from Dubai have been among the highest and they are expected to make big-ticket investments in housing projects in the coming months.