Latest Posts -Luxury Residential Spaces: The Emerging Nexus of investment by NRIs

The latter half of this decade has witnessed a global economic slowdown, with the pandemic, and socio-political dynamics offsetting a monumental transition in the international market. In stark contrast to this, the Indian economy has been steadily flourishing, with it ranking as the 6th largest economy per Gross Domestic Product. Moreover, a report by PwC Global predicts that the Indian economy will be the 2nd largest in the world by 2050.

The Indian real estate sector is a huge contributor to the GDP, with the sector currently being second to only the agricultural sector. The fact that the sector is projected to yield 13% of GDP by 2040, is one of the many determinants that are encouraging the multiplication of real estate investment in the country.

Particularly the residential segment in real estate has witnessed a staggering surge in numbers in the post-pandemic era, with the Indian sector currently being amongst the top 10 appreciating global residential real estate market.

The residential sector has always been a favoured investment destination of NRIs, and this inclination has been on an upswing in the last 5 years. According to the latest Consumer Sentiment Survey by Anarock, 71% of the respondents appraise residential real estate as the best investment. This favourable disposition is evident in the fact that NRI investment in India grew by 33% in 2022, with the luxury residential segment garnering colossal interest. This steady augmentation of momentum is the culmination of numerous factors.

Let us briefly discuss the recent trends and reasons behind changing dynamics of the real estate sector to comprehend why the contemporary environment is the best framework for NRIs to invest in residential property in India.

Favourable Economic Conditions

The Indian economy has been exhibiting a historical rate of economic growth, with the rapid development of social infrastructure and concurrent development of a booming IT/ITes and industrial hub. With a working force demographic of a whooping 67%, the human resource potential in India is immense. This, in combination with the relatively stable democratic- parliamentary governing forces, and a forecast of a steady 6.6% to 7% pace of GDP growth, has moulded the country as a favourable investment ecosystem.

Quite paradoxically, despite the steady economic progress, the Indian currency has been undergoing steady depreciation, with the exchange rate dipping to an all-time low of ₹83 vis-a-vis the US Dollar in October 2022. Commensurately, the power of the Pound sterling, Euro, Singaporean Dollar, and Canadian Dollar has also since appreciated. This uniquely oxymoronic situation has fabricated the perfect economic framework for NRIs living in countries with relatively stronger currencies.

Owing to the cheaper entry rates in the Indian residential real estate market, the usually higher disposable income of NRIs, and a favourable exchange rate, NRIs can purchase larger properties at affordable rates as compared to the countries they are currently residing in.

Propitious Government Regulations and Initiatives

Development of infrastructure and consequently real estate sector has been one of the prime focuses of the Indian government in the last decade. The government has transformed the sector into a buyer’s market with an increasing focus on initiatives and regulations to make the market more amenable to investments.

 The establishment of the Real Estate Regulatory Authority, for instance, has gone a long way in unfurling a new era of transparency and credibility in the Indian real estate market. The organisation has made the process of buying and selling properties a hassle-free process, free of duplicity. With this, the government has made all the information related to the properties available on this portal, reducing any possibility of hidden costs and thereby fostering confidence in NRIs.

In the same vein, rules governing stamp duty and Goods and Service Tax have further served to increase reliability.  Further, the government has imposed no restrictions on the number of immovable residential or commercial properties NRIs can hold, which showcases the country’s welcoming investment ecosystem.

Evolving Buyer Requirements

The pandemic has brought about a substantive shift to a hybrid model of working, with the workforce increasingly preferring to work from home. This change is glaringly obvious with an increasing number of NRIs preferring to work from their hometowns, where they can reside comfortably in larger and simultaneously affordable spaces.

The rapid infrastructural advancement and increasing connectivity in Tier 2 cities like Gurugram have led to the cropping up of thriving residential catchments with gated communities that are replete with a plethora of urban amenities. It is these exclusive communities that are highly favoured as an investment destinations by NRIs.  A study by Anarock corroborates this inclination by unveiling how over 54% of NRI respondents stated a clear desire for larger residential spaces.

The post-pandemic real estate market is therefore in a state of transition, with the demands for spacious, residential spaces on a rise. The reason for this transition is multifold, not the least of which is the augmenting demand by NRIs for luxurious, expensive homes.

As opposed to the risk-intensive nature of other investments, residential spaces in India are considered a flourishing asset class with a high rate of appreciation and a source of stable rental income. The trend of increasing rental income is especially being witnessed in luxurious residential spaces of micro markets in Tier-2 cities.  In addition to being an advantageous long-term investment, NRIs are also buying these luxurious properties as a second home or retirement home for their golden years.

The Flower Valley: The ideal investment locale for NRIs

Since its inception over 20 years ago, Central Park has successfully developed a legacy of providing enchanting residential spaces designed to elevate the lifestyle of its occupants. The concept based global township of Central Park Flower Valley is essentially an architectural marvel with expansive green spaces and exquisitely curated organic orchards and tranquil water bodies.

Located in Sohna, with the majestic Aravalli Hills in the background, the community is at a unique intersection where it is veiled from the hubbub of the city life, nestled in verdant foliage, and yet is seamlessly connected to the major commercial and retail hubs of Delhi and Gurugram.

From penthouses with picturesque vistas to expansive villas to lavish floors to uber-luxurious apartments, this township is designed to provide an exclusive residential experience tailor-made for different needs. The strategic location, extravagant living spaces, and Central Park’s legacy of creating iconic spaces make this an ideal investment destination for NRIs.