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NRIs Remain Unaffected By The Demonetisation Move

NRIs Remain Unaffected By The Demonetisation Move

NRIs Remain Unaffected By The Demonetisation Move
(Dreamstime)

For years, real estate has been one of the most lucrative avenues for the non-resident Indians (NRIs) when it comes to investing in India. People who have migrated to other countries due to attractive work-pay equations are still well-rooted with their birth country. This connect brings forth their willingness to invest in Indian real estate.

It has been observed that, however, the market is perfoming there is hardly any impact on NRI investments in India. For them having a place, which they call home back here in India, is the primary goal. Apart from emotional connect, many also see the market as a long-term investment destination that pays off well if the decision is comprehensive. 

Under the Foreign Exchange Management Act (FEMA), an NRI can own residential as well as commercial property. While there are not many rigid rule for NRIs in property investment, the only restriction is on buying of any agricultural land, farm house and plantation property. When investing, the complete transaction is done through Indian currency (INR) and NRI banking account. So, many NRIs must be worried about the current demonetisation move and how far they may get affected through this. 

So, are NRIs worried about the current demonetisation move and will they get affected by this? 

Dhiraj Jain, Director, Mahagun Group points out, “demonetisation is hardly going to affect the NRI segment as they hold minimal or zero cash in hand because it doesn't serve as active currency for them. Moreover, after demonetisation is complete, there will be definite price corrections in the secondary market which is the primary investment destination of NRIs. This said, Tier-I cities, which were already witnessing higher investments of NRIs when compared to other cities will witness even higher investments both in villas and big apartments.”

There is no doubt that NRIs do have their own inclinations and predilections when it comes to the city they would want to invest in. Largely, they prefer to invest in their states of origin. Large numbers of property investment from NRIs has been witnessed in the states like Delhi-NCR, Maharashtra, Kerala, Karnataka and Tamil Nadu.

On the other hand, there are some who cannot make a personal visit to the property. Such NRIs end up investing in markets that are stable and developers that are reputed. 

Cities like Delhi and Mumbai, where residential inventory has piled up, NRI investors can find good bargains in these locations, as the developers, too, offer lucrative discounts and attractive financial schemes. Luxury housing is the growing popularity among the NRIs as well. The kind of lifestyle they are leading in foreign countries do make them incline towards high standard of living, even if they are not buying for residing purpose. But, they do have a future prospect of coming back to home country makes them investing is luxury segment.

Every individual has their own set of reason while investing in Indian property market. “The basic reason for NRIs to choose Indian real estate market for investments is the price appreciation they witness over here. Also with so many policies and reforms happening in the last couple of years, it is now safer than ever for NRIs to invest in the real estate market of India. Property prices have seen a lot of appreciation in the last decade and with spaces getting scarcer by the day, prices are bound to keep going higher” says Rajesh Goyal, Vice President CREDAI-Western UP & MD, RG Group.

Goyal also points out, "also, there is not much risk involved in case of property investments because if notable caution is kept during the initial stages of ownership verification and documentation, the rest will remain just as a cakewalk." So, selecting a good real estate developer is the first most important thing. NRIs should be aware of all the hoax advertisements by small developers or property dealers that specifically boast of dealing in NRI-based projects. There are no such housing projects made with an aim to serve NRIs. The projects are being done with a focus on location and their targeted audience in each category and segments.

Also Read: How Demonetisation Will Cure Realty Of Many Ailments In Long Term

Last Updated: Tue Dec 06 2016

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