NRI Investment in Indian Real Estate to Reach 20% by 2025
Proptech giant NoBroker forecasts a significant surge in Non-Resident Indian (NRI) investment in the Indian real estate sector, projecting it to constitute 20% of total investments by 2025. This prediction underscores the escalating NRI interest and involvement in the nation's property market, fueled by a growing preference for long-term investment strategies.
NRI Investment Trends and Preferred Destinations
Over the past year, NRI participation in the Indian real estate market has steadily intensified. In 2019-2020, NRIs contributed approximately 10% of the total investments. Current trends indicate a clear preference for Bengaluru and Mumbai as prime investment hubs. NoBroker's survey reveals that 29% of NRIs favor Bengaluru, while 24% opt for Mumbai.
Bengaluru's allure stems from its thriving startup ecosystem, diverse cosmopolitan environment, and reputable educational institutions. The city has witnessed an increase in rental yield, boosting its attractiveness to investors. Mumbai, with its dynamic real estate market offering a mix of luxury, commercial, and residential properties, also holds significant appeal for NRI investors. As the report states, "Due to its vibrant startup ecosystem, cosmopolitan lifestyle, and top-notch educational institutions, Bengaluru has seen an increase in rental yield, making it a desirable destination for investors. NRIs also find Mumbai’s vibrant real estate market, which offers luxury, commercial, and residential properties, appealing."
Preferred Property Types and Budget
In terms of property preferences, 3 BHK units surpass 1 and 2 BHK units in demand, reflecting a clear inclination towards spacious and flexible living spaces. Furthermore, a substantial 26% of NRI buyers are actively seeking properties exceeding one crore rupees.
Challenges and the Need for Transparency
Despite the growth in NRI investments, challenges persist. The report highlights a significant hurdle faced by 82% of NRI buyers: the lack of information and transparency in the Indian real estate market. This underscores the crucial need for increased transparency and accessibility throughout the property acquisition process.