The state of Indian real estate had not been an attractive proposition for investments for quite some time. This was particularly true for the Non Resident Indian (NRI) segment, which always sought to keep its bond with its country of birth but desisted from investing in property due to a persistent lack of good returns.
“However”, says Ashwinder Raj Singh, CEO, Residential Services at JLL India, “With the resurgence of the Indian economy after the arrival of a stable government intent on boosting business in the country, things are changing. Today, the Indian realty market is once again a prime focus area for NRI investors”.
As per JLL India, the Indian realty sector is expected to grow at the rate of approximately 30% over the course of the next decade. The sector, which includes residential, retail, hospitality and commercial verticals is expected to attain a market size of approximately $ 180 billion by the year 2020. “The investment opportunity”, says Singh, “lies in the Indian real estate sector’s speed of growth than in its overall dynamism”.
The NRI finds himself in a very advantageous position today. The standard practice for Non Resident Indians has been to invest in land in states of their origin. But now, with residential inventories piling up in Delhi and Mumbai, chances of finding great deals in the National and financial capitals of the country are very high.
“Residential property prices have plateaued in both Delhi and Mumbai”, explains Singh.“Good returns can be expected only if one’s investment horizon is of three years or above – in which case, annualized returns of 10% can be expected from the third year on”.
The Right Time To Invest
JLL India has put forth the opinion that for NRIs who are planning to retire in India, this is the appropriate time to invest in property. There have been marked improvements in social and civic infrastructure, which would result in higher quality of retired life. There is however, a word of caution too.
“Under the best of circumstances, real estate is a capital intensive investment vertical”, states Ashwinder Raj Singh.“The best returns on investment are not attained by guesswork, but by decisions arrived at after weighing all the options for their merits and demerits. NRIs are best placed to reach such decisions if they consult professionals with a strong research-driven background”.