In the face of ongoing and upcoming recessions, many Non-Resident Indians (NRIs) are re-evaluating their decisions to purchase homes in their countries of residence. Factors such as citizenship, taxes, income structure, and more play significant roles in the concept of “settling.” Moreover, the ongoing and upcoming recessions have prompted NRIs to reconsider purchasing homes in their countries of residence.
The global economic downturn, factors such as the COVID-19 pandemic, geopolitical tensions, and fluctuating markets, has significantly impacted the purchasing power and financial stability of NRIs. Traditionally, real estate has been a preferred investment avenue for NRIs due to its potential for appreciation and rental income. However, the current economic climate has introduced a high degree of unpredictability, making property investments less attractive.
In countries like the United States, United Kingdom, and Canada, where a significant number of Indians reside, the housing markets have shown signs of cooling off. Rising interest rates, inflation, and a looming recession have made mortgage payments and property maintenance costs more burdensome. Consequently, NRIs are exploring alternative investment options that offer liquidity and lower risk.
Parth Mehta, Chairman and Managing Director of Paradigm Realty, feels that with leading global geopolitical unrest, falling value of the rupee, security, emotional pull, a stable government and a lucrative real estate market are some of the important factors that have led to an increased interest amongst the NRIs towards more stable, growing & more matured economy like India.
“It has been observed that buying a property in one’s homeland is always considered to be a safety net. Moreover, opting for a luxury property weighs equally on the aspects of investment, lifestyle, and security. Considering the economic disturbances around the world where some countries are at the cusp of recession and some are already reeling from it, NRIs with PRs as well are rethinking about deciding to buy a home in that particular country. Under this circumstance, a home of their dreams in their homeland is what gives them the satisfaction of being the proud owner of a property, a rental continuous realization, endowing a sense of security in these uncertain times,” Mehta said.
What has been observed is an increased NRI interest in purchasing a residence in their homeland, especially in the luxury category. The reason for this shift is the cost parity. For instance, while a 2 BHK abroad may be priced at Rs 7 crore or more, the same amount can be invested in India to buy a home that not only matches but often exceeds the standard of living abroad, offering an elevated lifestyle packed with panache.
Chintan Sheth, Managing Director, Sheth Realty is of the opinion that NRIs are showing interests to be a part of the dynamic growth through their real estate investments. The prime cities in India such as Mumbai, Delhi, Pune, and Bangalore, are observing a noteworthy investment influx from NRIs, pushed by rapid infrastructure developments, uplift in standards of living and new job opportunities.
“There is an emotional factor driving NRI investments beyond financial returns. The forthcoming infrastructural projects in Mumbai are set to progress connectivity across the central, southern and western parts of the city, along with Navi Mumbai and Thane, further pushing the drive. We are witnessing that many NRIs are not only looking for stability and a concrete connection to their roots but also leveraging the varied investment options available in the Indian real estate market,” he said.
Many NRIs want to invest in India due to an emotional connection and a desire to stay connected to their roots. For others, this is driven by India’s strong economic outlook and the highly favourable investment opportunities the country currently offers.
Bhavesh Shah, Joint Managing Director of Today Global Developers, said, “Many individuals in their 30s and 40s invest on behalf of their parents who are still residing in India, while others are drawn by the country’s rapidly growing economy. Real estate, especially in the Mumbai Metropolitan Region (MMR), is particularly attractive. However, many people are looking towards Navi Mumbai due to its expanding infrastructure and excellent connectivity. The satellite city’s liveability and real estate market is set to transform significantly, making it an increasingly attractive destination for investment.”
