The Dos and Don’ts of NRI Investing In Indian Realty

Amongst the NRI’s there are 3 types of investors. The first type look for short term gains over a period of 1-3 years, the second type look to buy for themselves and the third type are long term investors who want to be in the market for 7-10 years. The first type of investors have disappeared and more number of people looking to buy for personal use have surfaced.

In the second leg of GCIR, the special knowledge series culled out for NRI’s, at the prestigious House of Lords in London, Manisha Natarajan along with Samir Jasuja Founder and CEO of PropEquity, Reeza Karimpanal Sr VP Residential with Embassy and Virendra Adhikari CEO Asset India, discussed the changing norms of India’s residential market along with the do’s and dont’s of NRI investing in Indian realty.

As the discussion implored the question of NRI investments, Reeza Karimpanal Senior Vice President Residential Business, Embassy Group narrated her experience of slowing markets after 2015-16. Being a residential player in the market for more than 13 years, Embassy group was fortunate to make a switch from office spaces to luxury around 2011-13, when there was a great demand for it.

Their sales of a project like Embassy Late Terraces were then touching 180 units of 3.5 to 10 crores in a matter of three months. That was massive sales, however post the slowing down of the market, what helped them was the making of “ready to move in” homes.

Reeza said, “In Bangalore and in other large cities, luxury real estate is especially responding to ready to move in where the customers can actually touch and feel what they are getting.”

Samir Jasuja, the founder and CEO of PropEquity added that the market has stabilized in the last 6 months and the worst times are behind us. Over the last 3 years with the advent of demonetization, GST and RERA, the new launches have come down by almost 90%. The best cities to buy into are governed by 3 major factors, which are employment generation, infrastructure and the overall supply demand situations prevailing in the market. Banglore and Mumbai are two of the most hot sites of Real Estate because of the presence of all the 3 aforementioned factors.

“The NRI fraternity is used to 10-14% returns on investment from the residential segment in India” said Virendra Adhikari, the CEO of Asset India Ltd., on being asked about the do’s and dont’s of NRI investment. However, these figures have been bearish due to the current market scenario.

Amongst the NRI’s there are 3 types of investors. The first type look for short term gains over a period of 1-3 years, the second type look to buy for themselves and the third type are long term investors who want to be in the market for 7-10 years. The first type of investors have disappeared and more number of people looking to buy for personal use have surfaced.

Ms. Reema Karimpanal told that the motive behind NRI‘s buying back in India is an emotional connect to their motherland and to safeguard their retirement. Digital India has had an impact on the Real Estate industry as well. Now, the NRI clients can sit back and see their house from across the seas via augmented reality. With RERA coming in, the developer has to declare every detail about the project digitally and this makes the progress of the project transparent.

The agreement value as well as the final cost which is to be paid by the client including all amenities charges and maintenance charges should be revealed to the client and to his/her lawyer lawfully.

Adding on to that, Mr Virendra said that the onus is upon the client to check the RERA website for the authenticity of the promises of the developer. He requested all the NRI buyers to take some minutes out of their busy schedule to keep an eye on the deliverance of the said promises by the developer.