NRIs Investing in the Luxury Sector of the Indian Real Estate
Apr 24, 2019 Real Estate News
Indian real estate has always been a gold mine for investment for not just Indians about also for the Indians living abroad. The better return and new policies that are in favour of the buyer, has made it an even more attractive investment sector.
The purchasing power of the NRIs is more, and investing in luxury segment offer them better rental income and capital appreciation, making it an obvious choice for them. According to a survey, the affordable housing gives the returns of 3 to 5 percent to the NRIs and 2 to 3 percent for the ultra-luxury segment.
But not just the luxury segment, NRIs are also investing in the affordable segment for the better returns. The return on the affordable segment is around 8 to 10 percent. For the mid-segment is 6 to 8 percent.
Before the slowdown in 2015, the return on the investment in the residential sector of real estate was huge for the NRIs. But after the introduction of GST, RERA, the attention of the NRI for the investment shifted towards the commercial sector of the real estate.
The government has been advertising and promoting the affordable housing segment which has grabbed the attention of the NRIs. They have started making investments in the affordable segment for better returns. The reason behind the NRIs investing in the real estate in India is not only the returns but also having a property in their home country, so if they ever want to return to the country they have a place to stay.
The investment by the NRIs in India real estate has only gone up in the past decade. In 2014, the estimated investment from NRIs was $5 billion which went up to $10.2 billion in 2018. It is expected that the market for eh NRI investment will increase to $180 billion by 2020.
Since the government has approved the investment of capital gains in up to two properties, the interest from the NRIs has increased. Earlier, if the NRIs sold any property, the capital gain could not be split into two or more properties, it has to be invested back in only one property. Now, the government has released the norms for capital investment.
The option for the NRIs to invest has increased. From luxury to mid- segment to newly introduced affordable segment, there is a lot of options in the market for the NRIs to choose from. Even the REITs and commercial sector is not behind and are gaining more attention from the investors.
The purchasing power of the NRIs is more, and investing in luxury segment offer them better rental income and capital appreciation, making it an obvious choice for them. According to a survey, the affordable housing gives the returns of 3 to 5 percent to the NRIs and 2 to 3 percent for the ultra-luxury segment.
But not just the luxury segment, NRIs are also investing in the affordable segment for the better returns. The return on the affordable segment is around 8 to 10 percent. For the mid-segment is 6 to 8 percent.
Before the slowdown in 2015, the return on the investment in the residential sector of real estate was huge for the NRIs. But after the introduction of GST, RERA, the attention of the NRI for the investment shifted towards the commercial sector of the real estate.
The government has been advertising and promoting the affordable housing segment which has grabbed the attention of the NRIs. They have started making investments in the affordable segment for better returns. The reason behind the NRIs investing in the real estate in India is not only the returns but also having a property in their home country, so if they ever want to return to the country they have a place to stay.
The investment by the NRIs in India real estate has only gone up in the past decade. In 2014, the estimated investment from NRIs was $5 billion which went up to $10.2 billion in 2018. It is expected that the market for eh NRI investment will increase to $180 billion by 2020.
Since the government has approved the investment of capital gains in up to two properties, the interest from the NRIs has increased. Earlier, if the NRIs sold any property, the capital gain could not be split into two or more properties, it has to be invested back in only one property. Now, the government has released the norms for capital investment.
The option for the NRIs to invest has increased. From luxury to mid- segment to newly introduced affordable segment, there is a lot of options in the market for the NRIs to choose from. Even the REITs and commercial sector is not behind and are gaining more attention from the investors.
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