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NRI Real Estates
Indian Real Estate - an Emerging NRI Investment Destination
The real estate sector in India is undergoing a self-organization from being a highly unorganized sector. This has been one of the most crucial factors for India gaining its status as a highly favored investment destination through FDI and funds.
India has a huge market potential.
1) It is the fifth largest economy in the world (ranking above France, Italy, the United Kingdom, and Russia)
2) It has the third largest GDP in the entire continent of Asia.
3) It is also the second largest among emerging nations.
Indian Real Estate sector: Facts and Figures
1) Estimated size of organized Indian real estate sector accounts for USD 12 billion of India's USD 600 billion economy; just 2% way less when compared to mature economies.
2) Relaxation of FDI rules has brought about capital gains in every sector of Indian economy. The government is making efforts in liberalizing the guidelines and norms for investment through FDI, making them more NRI friendly.
3) Growth in the Indian real estate sector - an estimated 30% last year, owing to FDI norms and related growth drivers, By 2010, real estate sector estimated to be between USD 45-50 billion (Source: DSP Merrill Lynch)
4) Real estate sector has the potential to touch USD 90 billion in 10 years.
5) The real estate prices in general are on the upswing in all markets across sectors since last two years
6) An estimated 5 million homes were sold in 2005-2006.
7) In the next five years, the sales is expected to cross the 30 million homes mark.
8) Second homes: The trend of owning exclusive properties like beach houses, homes in the hills, near religious centers etc is growing fast.
NRI Real Estate trends
Bangalore which is currently the most dynamic real estate market has over a dozen new projects leading builders in the city that have designs on Non Resident Indians. There are numerous instances of people who lived overseas for many years and have settled in Bangalore for the last five or six years.
Increasingly, the drift is towards buyers with discerning tastes who care for open spaces. Lifestyle Habitat which is a top of the line premium residential project has takers from overseas Indians from Singapore, Nigeria, Djakarta and the Middle East. Luxury apartments or independent villas with facilities have a certain charm that makes them relate with their lifestyle.
Top end segment, which includes bungalows and independent villas grab attention from NRIs. There are a host of investing and financial management companies to advise on real estate investments and national banks are not far behind in coming up with innovative schemes on housing loans. Indeed, the top end segment includes bungalows and independent villas constituting a visible demand from the NRIs.
Concorde Silicon Valley, a project of the Concorde Group is situated in the heart of electronic city. The highlight of the project was independent villas with price ranging from ranging from $45,500 to $160,000. People were completely bought into the concept. Swimming pool, gymnasium, shopping malls, medical facilities, and tennis courts, and what have you are among the amenities.
The new developments are concentrated in North Bangalore or close to the proposed Hi-Tech City. High-end residential developments, after saturating in the Central Business District have branched out to different parts of the city.
NRI Real Estate Investment has been on a sharp rise in the recent few years. This can duly be accredited to the tremendous growth in the Indian realty sector with an average of 30% last year. India being the fifth largest economy in the world and the second largest among emerging nations, has shown a potential growth in investments destination for the NRI population.
Special NRI quota is also provided for various land sales by Government. Special Grants and services are also provided to the NRI population to lure more and more foreign investment. All the leading banks and financial institutions have separate NRI dealing services that cover NRE, NRO bank accounts, housing loans and other home loan related products. You can also refer to the various bank websites to find out further details about the NRI investment procedures and the help available.
The real estate bubble is blooming with huge investments from all sides, the Government of India (GOI), individual builders, infrastructure developers, large conglomerates and NRI's or the Global Indians. The contribution of the Indian Government and other factors to the attraction for NRI investments in realty sector of India includes:
Sale of land for residential, commercial and industrial development.
Infrastructure support for the realty development all across the country
Promotion of NRI investments and FDI
Policies for transparency and facilitation of real estate transactions
Liberalization of rules by GOI and RBI regarding NRI property and NRI homes investment.
No restriction on the maximum number of properties that can be bought
Easy finance availability
Simpler repayment processes like normal inward remittances or debit in their NRE or NRO bank account.
The various above-mentioned factors have given the Indian real estate market a potential of touching USD 30 million in the next five years. An estimate of 5 million homes recorded sales in 2005-2006. Even the returns from the real estate investments have out performed other investments. Easy home loan availability by financial institutions in India, NRI remittances and repatriation procedures and easy operability of NRE, NRO and NRCS bank accounts has emerged as the best of all the available prospects for the NRI's looking forward to returning to India.
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