It is never a bad time to invest in properties India as the country is facing a real estate boom for quite some time now. However, as an NRI investor, things may get confusing, if steps are overlooked. Moreover, at times there are drops in cities’ real estate rates. Fluctuations in market rates are also common, coupled with a few other factors. The biggest problem NRIs face in making a good investment decision is their distance from the country. They have to rely on brokers and property managers.
There are a few steps that every NRI homebuyer can follow to simplify the investment process. According to Housing.com, there are innumerable benefits of buying property in India. One such benefit is favourable long-term returns. The real estate market in India is growing at a phenomenal rate. The entire realty sector in major cities is expected to grow at 30 percent over the next decade. This includes residential, commercial, retail and hospitality verticals. We are looking at a whopping $180 billion market size by 2020.
The Indian real estate scenario is such that it will provide returns at a much higher rate than anticipated earlier. There is also a huge demand for commercial properties and investing in it will start giving returns in a few years. Office space in the commercially inclined cities may occupy about 200 million sq. ft. Post the global financial crisis, real estate prices in major cities like Mumbai, New Delhi, Bengaluru etc have dropped by around 35-40 percent. This is an amazing opportunity to invest in commercial real estate, NRI buyers may give it out on commercial lease that would be profitable in long-term.
If commercial units are not what a buyer is looking at, he/she can always invest in residential units. The commercial hotspots in the country attract hundreds and thousands of people every month for employment purposes. This makes them some of the best investment options in the country. More and more developers are developing premium projects to attract NRIs. In Bengaluru, there is no dearth of premium properties in areas such as Whitefield, Electronic City, Devanahalli and Sarjapur. These areas are also known for exquisite villas that are also in high demand.
Be it a commercial space in the hub of a business/IT park or a residential haven in one of the topmost localities, Bengaluru, along with New Delhi and Mumbai, remain the preferred destination for NRIs. Real estate sector in Chennai and Kolkata is also facing a boom. Experts are of the opinion that investing now is crucial for better growth rate and greater gains. This is simply because property purchased now will appreciate in value in years to come. This also increases the Compounded Annual Growth Rate (CAGR).
In order to take advantage of Long-Term Capital Gains (LTCG), buyers must invest at a comparatively lower rate and then sell of the property at a much higher rate in immediate future. Income tax applicable on LTCG is lower for NRIs and Indians alike. Similarly, Short-Term Capital Gain (STCG) is applicable is a property is sold within three years of acquiring it. NRIs can comfortably make investments in Indian real estate because of the ratio of Rupee to some of the foreign currencies.
This ratio is not fluctuating much and it will be wise to make hay while the sun shines. The Indian economy is growing at a rapid pace in terms of career opportunities and real estate. If an NRI is looking to move back to his homeland, now is the time to invest. Due to rapid urbanisation of some of the Indian cities, buyers are now more informed. Property exhibitions in leading cities are an excellent way for prospective buyers to gain access to insider information about developers, sellers, localities and other such important aspects.
These property exhibitions allow buyers to explore multiple projects in various cities all at the same time. Some of these exhibitions are also available online making it easier for NRIs to choose the best deal. However, one should also know that choosing a property in the cutthroat Indian real estate market is no easy task. Thus, it is always better to take expert opinion on the matter before breaking the bank.