Current statistics indicate that real estate is a favored investment avenue, a sentiment echoed by Non-Resident Indians (NRIs) residing in the United Arab Emirates (UAE). The depreciation of the Indian rupee is encouraging NRI investment in India, predominantly in real estate. A survey by Sumansa Exhibitions revealed that a significant 89% of UAE-based NRIs allocate their funds to real estate ventures.
NRI Investment Trends
NRIs play a pivotal role in India's overall investment landscape. Real estate investments surpass gold, bank deposits, and alternative investment choices in popularity. Sumansa Exhibitions conducted a survey amongst NRIs residing in the UAE. The research highlights that a considerable portion, about 89%, allocate funds towards real estate assets. They channel their surplus income into properties valued at crores of Indian rupees.
The survey data showed a 6% increase in real estate investment compared to the previous year. Sunil Jaiswal, the CEO of Sumansa Exhibitions, characterized real estate investment as a secure investment option.
Key Drivers for NRI Investments
He emphasized the remarkable returns associated with real estate investments. No other investment route provides comparable returns. The data suggests that around 26.7% of NRIs from the UAE prioritize real estate as a safer investment option. Mr. Jaiswal noted that investing in one's home country is often favored, considering that host countries typically do not grant citizenship, necessitating the eventual return of NRIs.
Furthermore, favorable interest rates bolster NRI investments. With the rupee's decline, interest rates appear comparatively more appealing to NRIs.
Preferred Investment Destinations
Mr. Jaiswal identified Mumbai, Bangalore, and Delhi as prime locations for real estate investment. Honey Katiyal, CEO of Investors Clinic based in Dubai, observed that many NRIs prefer high-end properties. This inclination seeks to capitalize on the rupee's depreciating value. Investing in premium properties aims to yield higher returns.
By focusing on high-end properties, NRIs aim to realize significant gains within 4 to 5 years. Factors such as builder reputations, value appreciation potential, transparent track records, and superior construction quality influence property selection. NRIs generally maintain a selective approach to their investments.
Emerging Cities
Hyderabad, Chennai, Kolkata, and various Tier 1 and Tier 2 cities also attract real estate investment. Cities demonstrating robust infrastructure development particularly appeal to NRIs.
Bank deposits remain a close second to real estate. Given the guaranteed returns, certain NRIs deem them a prudent investment. However, bank deposits seldom match the returns secured through real estate, positioning real estate as the superior choice for investment.