Builders See Strong NRI Interest in Larger Homes, High-Value Projects, and Long-Term Investments reports SURFACES REPORTER (SR)
Non-Resident Indians (NRIs) have significantly increased their investments in the Indian real estate market, with a surge in purchases observed in 2023 and continuing into the first half of 2024. According to the Anarock Group, demand from NRIs grew by 15-20% over the past 20 months, and their share in total real estate investments is projected to rise to 20% by 2025, up from the previous 10-15%.
Several factors are driving this increase. Optimism about India’s economic growth, stricter compliance norms under RERA regulations and capital appreciation have made the Indian property market more attractive to NRIs. Additionally, the rally in domestic stock markets has created newfound wealth, much of which is being channeled into real estate.
In 2023, NRIs invested over $13 billion in Indian real estate, and developers expect this trend to persist. A survey revealed that 80% of developers foresee an increase in NRI investments in 2024, with some predicting a 25% rise in housing demand.
Builders' Insights on NRI Investments
Saurabh Runwal, Associate Director at Runwal, noted that NRIs accounted for 8-10% of their sales, with many buyers opting for upscale apartments in and around Mumbai. Runwal highlighted the growing preference for luxury projects such as township developments, sky villas, and duplexes. He also emphasized that NRIs are increasingly seeking larger homes that provide comfort, privacy, and luxury, aligned with their living standards abroad. Runwal stated, “Larger homes offer an added sense of prestige, which is why we’ve seen an increase in sales of sky villas and penthouses to NRIs.”
Bhavik Bhandari, Chief Sales & Marketing Officer at Ashwin Sheth Group, affirmed that NRI demand is expected to continue for the next three years. He pointed out that NRIs prefer to invest with trusted, established brands with a strong track record. The growing transparency in the market, with real estate players listing and adhering to stricter disclosures, has given NRIs more options when selecting properties. Many NRIs are also choosing under-construction properties with a three to four-year horizon for capital appreciation.
Rahul Thomas, Whole-Time Director at Suraj Estate Developers, highlighted that NRIs invest in Mumbai’s real estate as part of a strategy to diversify portfolios. He noted that the depreciating rupee has also been a motivating factor, enhancing currency gains when repatriating funds. NRIs' investment motivations often include financial security for family members in India and taking advantage of market opportunities for long-term growth.
Larger Homes, Broader Appeal
The preference for larger homes priced over INR 90 lakh is a noticeable trend among NRIs. According to Anarock, nearly half of the NRI buyers purchase homes in the INR 90 lakh to INR1.5 crore range, with a significant number investing in properties priced above INR 2.5 crore. NRIs have traditionally favored apartments by established builders or resale bungalows, and now some are exploring plotted developments as well.
The sustained rise in NRI investments is reshaping the Indian real estate landscape, with growing demand for high-value properties in both metropolitan and emerging markets. NRIs are increasingly viewing real estate as a secure investment, diversifying portfolios, and, in some cases, planning their return to India, buying homes for personal use.