In a trend reversal post COVID-19, at least 53% of NRI respondents wish to buy properties in India in the coming months for end-use and 47% for investment, a CII-Anarock Sentiment survey has said.
One major factor influencing this change could be that many NRIs sought to return to India amid the pandemic-infused uncertainties and dwindling job prospects globally. Most saw the top seven cities as the best options, though many are also considering smaller cities to be close to their families.
With many intending NRI property buyers preparing to return to India, the highest demand is for luxury properties with state-of-art amenities. As many as 50% NRI respondents prefer luxury properties priced less than Rs 1.5 crore and 32% favour premium properties priced between Rs 90 lakh to Rs 1.5 crore. Only 11% favour mid-segment homes (priced in the range of Rs 45-90 lakh), and just 7% favour affordable properties.
"There has been a very perceptible increase in Indian housing demand from NRIs at this stage of the COVID-19 pandemic. In the recent years before COVID-19, many NRIs were in wait-and-watch mode amid the various structural reforms in the economy and the real estate industry,” said Anuj Puri, chairman - ANAROCK Group.
Before the pandemic, many NRIs keen on real estate preferred commercial properties - housing was low on their wish list. In short, the fallout of COVID-19 on global economies and job prospects has once again rekindled housing demand from NRIs, he said.
The survey also highlighted the demand for bigger homes. At least 48% NRI respondents preferred larger homes of 3BHK configurations (>1,500 sq. ft.) while 28% favoured 2BHKs. A significant 24% stated a preference for 4BHKs or higher configurations.
“The demand for luxury homes had fallen over the past few years, especially after DeMo," says Puri.
"In the housing sector, affordable homes were the top pick for NRI buyers in this period. The fact that luxury housing is back on the NRI radar despite unaccounted monies no longer being a factor is notable. Currently, the top metros favoured by NRIs are Bengaluru, Pune, Chennai and Mumbai. Tier 2 and tier 3 cities are also gaining traction, most notably Chandigarh, Kochi, Surat, Ahmedabad and Lucknow.”
In comparison to the previous survey (H2 2020), trends indicate that Chennai is seeing increasing interest by NRIs, while their preference for the other top cities remained more or less the same. IT hub Bengaluru continues to be the hot favourite for at least 22% NRIs, followed by Pune with 18% in favour of it. Chennai drew 17% votes."
Developer credibility is the top priority for most NRI respondents scouting for property in India. Construction delays have cast a long, persistent shadow of doubt in the minds of expatriate Indians who have spent many years abroad - and therefore out of sync with on-ground market developments.
Most NRIs will only deal with branded and leading developers now. Rational pricing and reliable after-sales service - which is perceived as assured with branded players - are NRI property buyers' second and third top priorities.