Real Estate Buzz! No more interest in luxury? Now, NRIs are focussing on affordable, mid-segment housing

In a bid to take advantage of the government incentives, NRIs have started to shift their focus on the affordable and mid-segment housing in India from their traditional high-end luxury housing segment. With a series of economic reforms, improving transparency and better governance, foreign investments in Indian real estate are set to scale new heights. With laws now allowing 100 per cent FDI in construction development and REITs now in place for commercial real estate, the Indian real estate industry is witnessing good response from the NRIs in the affordable and mid-segment housing, say industry insiders.

Elaborating upon the NRIs new investment pattern Shajai Jacob, CEO — GCC (Middle East) at ANAROCK Property Consultants said, "Having burnt their fingers on dubious developers in previous years, NRIs now prefer to park their investment with reliable, organized builders who register their projects under the Real Estate Regulation and Development Act (RERA) and are generally known for transparent business practices." He went on to add that while the end-user demand for Indian luxury properties continues, albeit on a more muted note, many NRI investors have now turned their focus to affordable and mid-segment housing. This is because the Indian Government has provided considerable incentives to buyers of such housing, and also because such properties are in higher demand and therefore give a higher rental yield as well as better long-term appreciation.

Standing in sync with ANAROCK views Rakesh Yadav, CMD, Antriksh India Group said, "NRIs generally prefer investing in properties in their home state or city, largely because they are more familiar with those territories and invariably have family or friends who can handle the management and renting aspects. However, more experienced investors with sufficient knowledge about other cities - or those working with reputed real estate consultancies - do foray into other cities as well." Previously, NRIs traditionally invested in high-end luxury properties back home. For end-users, such properties offered them the international lifestyle they are accustomed to. For investors, luxury properties generated sizeable rental income.