Non-Resident-Indians (NRIs) invested $13.3 billion in the Indian real estate market, over the financial year 2020-21 – an increase of 6.4% in investment volume, compared to the previous year. These investments had diminished by 35%, in Q1 of the period in question, due to the global pandemic. But favourable regulatory policies, a correction in the value of the Indian Rupee, and offers specifically targeting NRI investors with attractive payment plans, saw a massive bounce-back beginning in the second quarter, and lasting for the rest of the year.

In fact, the report by 360 realtors, which first noted the increased presence of NRI investors in the Indian real estate market, expects that such investments will rise further, to $14.9 billion, in FY22 – which represents a growth of 12%.

GCC based NRIs are major contributors to this influx of investment

A significant chunk ofthe NRIs investing in Indian real estate, are from GCC nations, contributing around 41% of the investment volume for financial year 2020-21. Expatriate Indian communities currently living in the USA and Singapore also feature on this list, but are a rather distant second and third place, at 17% and 12%, respectively.

Another significant factor, responsible for the increase in overall volume of investment, is that NRI investors are purchasing more upmarket and larger properties, resulting in a larger average ‘ticket size’, than previous years.

Digital technology has played a crucial role, as a facilitator

Given the fact that the global pandemic has restricted international travel, and the severity of the second wave in India, this rise in investment might seem baffling, at first glance. Especially, considering the size of the financial commitment that a real estate purchase represents. However, the widespread adoption of digital technologies, by realtors and brokers servicing this segment, has proved to be a gamechanger. 

Virtual tours and remote 3D viewing, using AR and VR technology on dedicated digital platforms, have allowed real estate brokerage firms to feature and sell Indian properties to NRI buyers. Secure online transactions are another digital tool, which has kept interested parties on board, and allowed deals to be completed remotely.

A breakdown of the demand, by segments and location

In the luxury housing segment, Delhi and Mumbai, the two premier cities of the country, have proved to be clear favourites, over the first quarter of 2021. These two cities accounted for the largest chunk of properties valued in excess of one crore Indian Rupees, with Bengaluru and Hyderabad being the next most sought after in the category.

In the affordable housing segment, demand was led by Kolkata, followed by Chennai, Ahmedabad, and Pune. NRI buyers also showed a clear preference for ready properties, and those nearing completion – even showing a willingness to fork out a premium, for such homes.

The Indian real estate market expects this trend to continue, this year

Although the rental market in India has been affected very adversely, by the surge of Covid infections in the second wave, an overall positive sentiment has held firm, in the property buying segment.

In part, this is the result of an overall global trend towards purchasing a property, rather than renting, in the aftermath of the pandemic. To some extent this is reflected within the Indian market as well. However, the influx of investments from NRI buyers, who are banking on authorities and healthcare gaining control of India’s second wave of infections in the long run, is proving to be a timely shot in the arm for Indian real estate. With the number of new infections and fatalities beginning to register a slow but steady drop, such expectations could stand vindicated, over time.