NRI investment in Indian Real Estate and the falling rupee
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By Prashansha
Digital Marketing Executive

The average income of an NRI is above $100,000. As a matter of fact, NRIs are the richest community in the US. Indians are the largest diaspora in the world; approximately 16 million Indians live beyond the borders, across the oceans.

Surveys suggest that more than 50% of returning NRIs are looking forward to starting their career in entrepreneurship and start-ups. Around 44% NRIs in the USA want to return, a majority of them are families with kids.

There is no denying that the average lifestyle and living standards in most other foreign societies are marginally, if not drastically, different from that in India.

Residential properties in semi-urban and urban spaces are slowly but surely keeping pace with the necessities of an average Indian NRI returning from the US or Europe or even Australia.

Upscale residential projects are being constructed by real estate groups who can ideate and reflect the lifestyle for the expectant homebound NRI.

A residence is a deciding factor for the NRI and this is the best time to go ahead with an investment in a residential property in India

NRI Investment from the Monetary Perspective

The Dollar is surging higher against the Indian rupee!

So are the Pound and the Euro!

INR has depreciated by 13% since the beginning of 2018. This is a déjà vu of 2012 when INR ephemerally fell by nearly 18% between February and July. The same period of time also saw NRIs contributing to nearly 25% of the total Indian realty market.

This synchronicity of a falling Rupee and a growing NRI investment in Indian realty has not happened this year, yet. A property of Rs. 2 Crore is worth around $270,000 today. Winding the clock back to the end of 2017, the same Rs. 2 Crore property would have been worth $310,000. The same applies to most other leading foreign currencies.

These figures may vary with time, but as far as the current situation persists, this is the best time for any investment. The variance of $40,000 is inevitable and its implications are multi-fold.

Residence obviously comes with additional expenses of residing. From this context, living in India can be a more affordable alternative than in the US or Europe. To continue from the illustration above, $40,000 will amount to nearly INR 30 Lakh today. Even for a layman with a minimal knowledge of the INR and the USD, Rs. 30 Lakh is worth a lot more in India than $40,000 is in the US.

As again, the only variable that remains is the availability of a property which can echo at least a far-flung resemblance of the seemingly better off foreign lands.

NRI & INR: A Win-Win Milieu

India is one of the strongest economies in the world. The Indian millennial population is forecasted to grow larger than China and far larger than the US. In the next 5 years, India will have a working-age population which will make it the richest economy in terms of human resources.

The fast-growing Indian middle class is one of the largest consumer markets in the world. Considering their propensity to consume and purchasing power, the Indian economy is the upcoming global hotspot for brands across all industries.

In short, India has the potential to be among the top 3 largest economies in the world!

However, a lot of this impending success story depends on the nation’s non-residential Indians. Where the nation continues to face crises today primarily includes its weak run against top foreign currencies. There is no doubt that India is facing competition against the likes of the USA and China. It is the erstwhile NRI who can bring foreign currencies into the country’s economy.

The NRI investing in a 2 Cr. property in India strengthens the Foreign Currency Reserve of the nation. This, in turn, strengthens the economy against the respective foreign currency. As again, what matters for an NRI is the opportunity to invest in a property which will scale in value over time.

Investment with Foresight

As a market, real estate is affected by both the current situation as well as future potential. The current real estate market is seeing a downturn in property prices. But it is also seeing major investments and constructions of premium & exclusive housing estates.

The impending future of the economy is the silver lining, the hope which is pushing real estate conglomerates to create properties for Indians who will represent the country’s economy.

For NRIs, these real estate projects, coupled with the current de-valued INR, are opportunities to build their future on. Property valuation for these premium projects will grow with the Indian economy. To look at such an investment from a much more holistic perspective, an NRI can consider such properties as their residences for the future.

Let your kids grow up to the future of India!

Investment in Kolkata’s real estate for NRIs

Properties in Kolkata are currently seeing a period of under-appreciated pricing. This period follows a similar epoch of escalated real estate prices; a direct market reaction to decreasing investment. With a number of high-end premium real estate projects coming up in Kolkata, the market has responded with lower average prices.

The central government collaborated with the World Bank in order to rate and index states in Ease of Doing Business and West Bengal got the top place with a score of 99.73%, closely followed by Chattisgarh and Madhya Pradesh.

For the NRI thinking about coming back to Kolkata, this can be the perfect time to go ahead with an investment, especially coupled with the profitable INR to USD terms along with the benefits the HIRA regulation brings to the table.

HIRA implications

Moreover, the introduction of HIRA has empowered the buyers or investors further, and buyers now can get all the information about a project before taking the decision to invest. Apart from that, HIRA made more transparent and it is compulsory for every developer to follow a standard set of method to calculate the carpet area, the area of balcony, lobby and other areas of the project.

Apart from that, HIRA also gives the power to the investors to claim full refund if the possession is getting delayed and has equalised the interest rate for both the buyers and the builders in case of delay in payment or possession, whichever is applicable.

As an NRI, you need to invest in tune with your future. If you’re expecting a return of investment, you need to capitalise on a property which will scale in value before the INR appreciates against the USD or other currencies perse.

On the other hand, if you’re investing for more than just a profitable monetary scenario, if you’re thinking about returning back to India, buy a property which you can call home; where you and your kids can experience India; not for what it is, but for what it can be.

“Home is where the heart is.”

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