top of page

NRI Investment Boosts India's Real Estate Market Back to Pre-Pandemic Levels

Despite the challenges posed by the COVID-19 pandemic, the Indian real estate market is showing signs of recovery, with Non-Resident Indian (NRI) investment playing a significant role. The weakening of the Indian rupee against major currencies such as the US dollar and the Dirham has created a buying opportunity for NRIs, leading to an increase in investment in the Indian real estate market.



According to recent reports, NRI investment in Indian real estate increased by 6.4% or $13.4 billion in FY21 compared to FY20. This growth is attributed to several factors, including the success of virtual tours and digital inspections through internet-driven technologies. In addition, the Indian government's 2022-2023 budget offered favorable incentives for NRI investment, including the reduction of the maximum surcharge on short and long-term capital gains from 37% to 15%.

Of the large volume of NRI investment, 41% has come from the Gulf Cooperation Council (GCC) countries, particularly the UAE. This trend is expected to continue, with an increasing number of NRIs from the GCC showing interest in making high-risk investments in both metro and non-metro cities. The trend has created a new market for luxury vacation homes in non-metro and coastal locations, as well as high-rise condominiums in major cities.


Picture: Kumaon Jagran

Historically, NRIs from the GCC have favored metro cities such as Delhi-NCR, Gurgaon, Mumbai, and Chennai for investment. However, they have recently been exploring smart towns such as Ahmedabad, Goa, Chandigarh, Panchkula, and Kochi. Gurugram is one of the most important NRI investment markets, attracting NRIs and foreign expats due to its well-developed infrastructure, cosmopolitan culture, and the presence of Fortune 500 companies. There is also an increasing demand among NRIs for upscale, well-appointed, and secure residences near Golf Course Road.

The luxury real estate market is expected to continue to grow, with NRIs showing a preference for ultra-luxurious and luxury properties, especially second homes. The pandemic has exposed NRIs to the importance of having a community where everything is at their fingertips, and they are seeking reputable real estate developers and homes that correspond to their status. In addition, some NRIs in GCC countries are simply looking to return home after being exposed to the pandemic.

The average capital value of a land parcel in Delhi has increased by 4% year on year, with the greatest YoY increase in land prices in South-West Delhi at 11%. There has been a flurry of real estate transactions in New Delhi's most desirable neighborhoods, including Prithviraj Road, Vasant Vihar, Greater Kailash, and Panchsheel Park, since the property registration office reopened following pandemic restrictions.

In conclusion, despite the challenges posed by the COVID-19 pandemic, the Indian real estate market is returning to pre-pandemic levels, with NRI investment playing a significant role. The weakening of the Indian rupee, favorable government incentives, and the growing trend of NRIs returning home are contributing to the growth of the market. The luxury real estate market is expected to continue to grow, and smart towns are becoming increasingly popular among NRI investors.

94 views0 comments
bottom of page