NRIs: The Next Leg of Investors in Indian Realty
Between 2014 to 2019, the strength of the Dollar ($) against the Indian Rupee (?) has grown rapidly.
From INR 59 in 2014, the exchange rate has touched INR 71.60 in November 2019. According to experts, it is expected to rise even more this financial year, to the range of INR 75. With the strengthening of the dollar, it is expected that the number of NRI investors in India would increase.
The rise in the value of the dollar against Indian rupee implies that when buying a property in India, an NRI now has higher affordability than they had five years back. Thus, NRIs can now buy more properties in India.
Moreover, NRIs now have a larger variety of properties to choose from. Earlier, residential properties used to be their main option. But now with the development of a large number of commercial properties in several cities, more NRIs would be investing in projects in this category. A variety of commercial properties like Office Spaces, Shopping Malls, Cinema Halls, Warehouses, etc., are now available to dollar investors. Another lucrative investment option is Co-Working Spaces. The trend of employees of various companies working under the same roof is becoming popular as it is more affordable & also offers ample networking opportunities.
The ‘Make in India’ initiative by the Central Government has led to the development of various industries, which resulted in the growth of the commercial real estate market.
Under this initiative, indigenous firms are being encouraged to set up in different locations in India, also with the help of foreign investors. Investors would especially want to invest in Tier-II cities as they offer a high demand for rental properties, both commercial and residential. With the development of infrastructure, these cities have been attracting leading companies from abroad, creating a good market for rental properties.
Earlier, investing in the Indian real estate market used to be risky as there were shady operations by investors, along with a lack of transparency. However, the government has passed a number of laws and legislations ensuring transparency as well as the security of the investors.