NRIs Travel Down to the South to Invest in Real Estate

The total NRI population in the world is 32,2 million. The largest NRI population is in the USA, with 13 percent of its population residing there. Saudi Arabia has the second largest NRI population, with 12 percent. In 2020, over 75 percent NRI population in South India looked for real estate investments, according to a study conducted by an online property portal. There is a huge influx of young people from the southern states, who either go to study abroad or work in other countries. Once they make enough money, they want to invest in property in their home state or a big city within their state. The southern markets have never been cheap, and developers in the south have a better understanding of the local dynamics than their northern counterparts.

NRI investors who have been keeping an eye on the country’s residential property market and the economic environment created by the COVID-19 pandemic have decided that now is the best time to buy residential property. Currently, the southern property markets are strong and mainly driven by the demand of end-users. The southern cities have managed to contain the slowdown of the residential market by controlling the launch of new projects and focusing on timely project completion. There is a large amount of land available in the region for development. In addition to this, the southern markets are highly attractive due to the presence of good social & physical infrastructure, good metro connectivity, and strong employment hubs, led by the IT /ITeS industry and manufacturing industry.

According to the research, Karnataka received the highest number of inquiries for real estate properties (31%) from Non-Resident Indians (NRIs), followed by Tamil Nadu (26%), Kerala (25%), Telangana (22%), and Andhra Pradesh (20%). ANAROCK research showed that Bengaluru attracted the highest demand (24%) from Non-resident Indians (NRIs). According to Knight Frank’s assessment, the city has 127 km of Metro projects and 270 km of road projects in various stages of construction. The city’s metro phase 2, extensions and new lines are expected to be finished between 2021 and 2025, while major road projects such as the Peripheral Ring Road (PRR), the Satellite Town Ring Road (STRR), and the Suburban Rail Network (SRN) are likely to be finished by 2025. Transit-related infrastructure developments are expected to strengthen Bengaluru’s position as an ideal gateway for realty-focused investment in Asia, thus making it a preferred destination for NRI populations to settle or invest in.

However, Bengaluru isn’t the only one in the South that is preferred. The Tamil Nadu State Government’s comprehensive infrastructure road development program is improving several flyovers and highways, as well as primary routes. The improved transit infrastructure through the Metro Rail will also improve connectivity and reduce travel time to important employment centers and developed markets.

NRIs are seeking RTMI homes. Most of them are purchasing for end-users due to the uncertainty caused by the coronavirus pandemic. The pandemic also heightened the emotional attachment of NRIs to physical assets back home in India. In addition, they are motivated by the depreciation of the rupee, which translates into more purchasing power, and ongoing developer offers and discounts.

RTMI properties have lower risk and are easily available for purchase. The demand for RTMI units is also driven by the anticipation of delayed deliveries of under-construction units. RTMI homes are not subject to the Goods and Services Tax (GST) and developers are offering various incentives to increase sales and bring more buyers to the market. This has attracted the attention of NRI buyers. In the past, under-construction homes were a popular choice among Indians as they were more affordable than RTMI homes and the rates of the properties would increase significantly during the construction phase. However, this is no longer the case.

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