NRI investment up, number of end-users down in urban housing | News from Mumbai

Vivek Karvande, a manager at ABB Corporation, moved to the US in 1996. Within four years, he had saved enough to invest in a property back home. His first 2BHK in Thane has been fetching him rent ever since. After building a good corpus and adding some savings, he recently increased his stake in the Indian real estate sector by purchasing a 3BHK in Bandra and one in Pune. Three houses and the hope that at some point, generations later, someone might want to return to India, is all the connection he has to his homeland.

“My main reason for buying a property in India was the alternative income I get from the rent I give to my parents who don’t want to leave India. It is also a form of security for me and my family if we ever want to come back to India. Owning a property in Mumbai is also a way for me to be connected to my roots and leave something behind for my children in the hope that at some point they will want to return to their homeland,” said Karwande, echoing the sentiments of many NRIs who may live thousands of kilometers away but have a backup in India. “Both my daughters were raised in the US. The chances of them wanting to move to India are not very high, but then again knowing that they have houses there can give them the confidence to do so if such a situation ever arises,” Karwande added. He’s not the only one. Londoner Manali Mehta already had a family home in Ghatkopar when she emigrated to the UK after marriage. The couple rented it out for 35,000 rupees a month to earn “a good alternative income that we keep for our children”. They also recently bought two new 2 BHK apartments in Andheri, one of which was rented out.

“I believe the reason most NRIs choose to buy houses in India is because it is a way to stay connected to our country of birth and because property is more affordable in India than in London,” Mehta said. Mumbai builders say the NRI buyer segment is only expanding. “Recently, we have witnessed strong demand from NRIs across all our residential segments. Our NRI sales have more than doubled in the last two years. We expect to do a business of Rs 1,600 crore this year against Rs 1,200 crore last year and Rs 800 crore in 2020-21,” said Prashant Bindal, chief commercial officer, Lodha.

Prominent developer Niranjan Hiranandani said his numbers show that on average 25% of real estate purchases are by NRIs. “India’s growth story is strong and they believe in it. Second, in markets like the Middle East, one cannot own property, so Indians are looking to invest at home in India. Parents, siblings who are based in India entice those, move to have a base in India as well.”

While end users looking to maintain a vacation home are the majority, there has been a significant increase in investors and speculators, which in turn has an impact on prices. “According to a recent consumer survey by ANAROCK, when asked whether respondents wanted to buy a property for end-use or investment, the ratio of end-users to investments in MMR stood at 63:37 in the first half of 2023. Back in the first half of 2019, the ratio was 71:29. Thus, there has been an 8% increase in the number of investors in MMR,” said Anuj Puri, chairman of property consultants Anarock Group.


According to a report by a real estate firm, NRIs invested $13.1 billion in the Indian real estate market in FY21, with the inflow likely to have grown by 12% to reach $14.9 billion in FY22. Investment volumes rose 6.4% compared to the previous fiscal, even as overall market sentiment worsened due to the pandemic. Inflows from the US expat community accounted for 17% of total purchases, followed by Singapore (12%). Other major source markets include Canada, the United Kingdom, Germany, Kenya and South Africa. Not only has the overall influx from the diaspora increased, research shows that the average ticket size per sale has increased. In FY21, average US ticket sizes reached $124,000 compared to $111,000 in FY20. From Singapore, average ticket sizes rose to $93,000 from $91,000 in FY20. Similarly, the average purchase ticket size by UAE-based NRIs grew by 11.5% to reach $97,000. more, 30% of the business value is in the aspirational category between Rs 2 crore and Rs 5 crore and 10% of the value in the luxury category is above Rs 25 crore. Overall, 80% of NRI transactions worth more than Rs 2 crore,” Bindal added.

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