Non resident Indians to invest in India

After a long time, India is again hot property for NRIs. It is estimated that over 20 to 25% of all properties worth over Rs 1crore are bought or funded by NRIs. NRI investment is doubled in the last couple of years due to more relaxed rules adopted by the government.

Anju Puri MD of Trammel Crow Meghraj says, over 50% of the NRIs, both in Dubai and London seek housing loans, which are now available on easy terms.

Agrees Aanjay Chandra MD of Unitech Group, “Availability of loans at attractively lower rates is the abundant choice in different parts of the country and revised government policies are luring more over seas Indians.”

The surge in demand follows changes in investment laws that allow NRIs to freely move towards to investment in and out of the country.

Developers are also striking while the Iran is hot by participating in exhibitions across the world. Exhibitions in India and a few globally in 2005, saw larger participation with single event attracting as many as even 35 property developers and many banks of London, New York and Dubai.

All the participants appeared to be keen on offering services globally to help NRIs acquire and manage property in India. The UK and US is providing to be a particularly exciting market with an eager working class generating much of the demand in May. India first land property and development, the first of its kind in London promises to be a very big draw.

Raj Loomba, chairman Rinku Group PLC says, “Many people of India origin, even second generation NRIs, are now looking back at home. They are planning to buy vacation homes. This is the one reason which also prompted us to look at organizing to this exposition. Here the developers can show what they can offer to NRIs those are looking back at home. High profile NRIs are looking at independence during their stay in India which the developers are offering. The NRIs are a different market very choosy which is why the demand is a little slow now but it will definitely pick up.”

After a successful off take in few last years, properties of Rs 1.5 crores-plus bracket, several developers in Mumbai, Pune, Delhi, Punjab, Gujarat and kerala have taken it as an encouraging step to plan pricier projects. Besides this is a good time for investment in such projects as their has been a 10-15% price rise mainly due to higher construction cost with steel and cement price are higher.

The changing market dynamics are also driving developers to take inspiration from the skylines. of the high rise condominiums in advanced economies and offer the NRIs matching quality. There is also quite a mad scramble to come up with plush villas and housing complexes. All aimed at the overseas clients, availability of loans at attractively lower rates abundant choices in different parts of the country.

And revised government policies are luring more and more overseas Indians. The surge in demand follows changes in investment laws, allow NRIs to freely move their investment in and out of the country.

Says Dr. Devinder Gupta MD of BNB Properties, “In fact after watching the market many development authorities in the metro cities are changing their land auction policy and allowing the disport to take part in the bids of Delhi Development Authority for all non resident Indians and people of Indian origin those are looking to a house back at home. Now they could apply for a bid for a piece of land in DDA land auction.

Says a senior DDA official, “It has always been our endeavor to offer the best to our customers inclusion of these categories in our auction programme. It is a part of our effort to provide them with a lifetime opportunity to make their own dream house at prime locations in the capital at a reasonable price. This decision will not only expand our clients but will also be a dream offer for an entirely new set of investors.”

Adds Dr Gupta, “In Delhi there is a lot of demand for residential plots as it gives enough freedom to a buyer to build a flat of his own choice. This scheme is the first step towards allowing private participation in housing activities. For the first time apart form these organizations NRIs and PLOs will also be allowed to bid in these auctions. And we believe that the NRI community is a big market that is waiting to be topped.”

The new policy initiative is in line with guidelines approved by reserve bank of India under the foreign exchange management act (FEMA) this new scheme is expected to auger well for the residential real estate market in the capital.

Says T Charkarvati head of India Property Research says, “ The fact that apart form NRIs,PLOs corporate bodies, PSU and private banks are now allowed to participate in the auctions, could also generate higher levels of demand from such situations which had to previously resort to land acquisition through market channels. This would make the market more transparent and buoyant.”

“This is a golden opportunity for both the public and private sector banks to build residences for their employees in the capital itself. These plots are strictly for residential purposes and not for any commercial activity. Anybody bidding for the plots should therefore, take the necessary precautions not to violate these riles”, says Sanjay Chandra.

The decision made by development authorities is a significant step in allowing good residential developments in the city to cater to one of the largest and affluent catchments mainly NRIs.

The decision is exemplary given that it was timed perfectly in a buoyant market. Hence the realization from it has also been unprecedented.