NRI end-users will dominate the home buying trend in the Indian market
The photo has been used for illustration purposes.
In a significant post-Covid-19 pandemic trend, a much higher percentage of NRI respondents in the latest CII-Anarock Consumer Sentiment Survey are looking for properties for personal use. At least 53% of NRI respondents who will buy properties in India in the coming months are expected to buy for end use, while 47% will do so for investment. The pre-Covid-19 survey in the first half of 2019 saw a reverse trend, with an end use / investment ratio at 32:68.
Compared to the previous survey (S2 2020), trends indicate that Chennai is seeing increasing interest from NRIs, while their preference for other major cities has remained more or less the same. The Bengaluru computer center continues to be the favorite for at least 22% of NRIs, followed by Pune with 18% in favor. Chennai obtained 17% of the vote.
One of the main factors influencing this shift could be that many NRIs have sought to return to India amid the uncertainties of the pandemic and dwindling employment prospects around the world. Most viewed the first seven cities as the best options, although many also considered smaller towns to be close to family.
With many potential buyers of NRI properties preparing to return to India, the highest demand is for luxury properties with state-of-the-art amenities. 50% of NRI respondents prefer luxury properties priced at INR 1.5 crore, and 32% prefer high-end properties priced between 90 lakh INR – 1.5 crore INR. Only 11% favor homes in the middle segment (price INR 45-90 lakh), and only 7% favor affordable housing.
âThere has been a very noticeable increase in demand for Indian housing from NRIs at this point in the COVID-19 pandemic. In the last few years before COVID-19, many NRIs were in standby mode amid various structural reforms in the economy and the real estate sector. Before the pandemic, many NRIs passionate about real estate preferred commercial properties – housing was low on their wishlists. In short, the fallout from COVID-19 on global economies and employment prospects has once again revived the demand for housing among NRIs, âaccording to Anuj Puri, chairman of Anarock Group.
The CII-Anarock consumer sentiment survey also highlighted demand for larger homes. At least 48% of NRI respondents preferred larger homes in 3BHK (1,500 square feet) configurations while 28% preferred 2 BHK. A significant percentage of 24% declared a preference for 4 BHK or higher configurations.
âThe demand for luxury homes had fallen in recent years, especially after demonetization. In the housing sector, affordable housing has been the first choice of NRI buyers during this period. It is notable that luxury accommodation is back on the NRI’s radar despite unaccounted for money no longer a factor. Currently, the main preferred subways for NRIs are Bengaluru, Pune, Chennai and Mumbai. Tier 2 and Tier 3 cities are also gaining ground, including Chandigarh, Kochi, Surat, Ahmedabad, and Lucknow. “
The credibility of the developer is the top priority for most of the NRI interviewees looking for real estate in India. Most NRIs will now only deal with branded and top developers. Rational pricing and reliable after-sales service – which is seen as assured by brand players – are the second and third priorities for buyers of NRI properties.
I bought a commercial property with my friend in Pune. My friend recently expired for health reasons. Now, how will the 50% of the property be treated? Please specify. Hitesh Shah, Sharjah.
You have to look at the purchase contract which will define the ownership and the respective rights in the commercial property. In the event that he is held in joint possession, the deceased’s share will be transferred to the survivor.
I am planning to invest in a rental income generating property in Bangalore. Is the loan available to invest in such a property? What are the tax advantages by investing in such categories? Arvind Khanna, Dubai.
You can invest in residential or commercial real estate with the sole objective of receiving a steady stream of rental income. Loans are available while investing in rental income generating properties. Tax benefits are also available. On rental income, you will benefit from a standard deduction of 30% for the costs of repairing, maintaining and recovering the property. This deduction is available regardless of whether or not you spend on the repairs. In addition, a full deduction with no upper limit is available on the interest paid on the loan amount taken out for the purchase of real estate that is donated on rent.