Not just domestic homebuyers, festival season attracting NRIs as well

The ongoing festive season between October and December, which peaks on Diwali or Deepawali in November, is all set to provide a further fillip to residential property sales, which have been on an upswing all year.

Santosh Gowda, a Singapore-based non-resident Indian (NRI) is flying down to Bengaluru on November 16 to finalise the purchase of one of two 3BHK apartments, one close to MG Road or the other on Benson Street, for Rs 4.5-5.8 crore.

Another NRI is flying down from the US on November 13 to complete the documentation work for a property he has picked up in Bengaluru.
Though the deals were confirmed in the past few months, both of them have chosen the ongoing festival season to finalise the deals and complete the paperwork.

The ongoing festive season between October and December, which peaks on Diwali or Deepawali in November, is all set to provide a further fillip to residential property sales, which have been on an upswing all year.

Data from real estate consultancy Colliers India say the fourth quarter of last year's calendar year saw a 42 percent rise housing sales, more than double that of other quarters.

And the Indian expat community is very much part of the bandwagon.
Sunil Singh, director of Realty Corp, a Bengaluru-based consulting firm, said at least 20-25 percent of NRIs prefer to close the deals for buying residential properties on or around Diwali or Diwali. "While developers' offers or bank deals play a role, most of them want to commence the journey on an auspicious day," he said.

Related stories

Souptik Datta

Sub Editor|Moneycontrol

• 
  If illegal floors can't be razed, demolish the building, says Karnataka High Court
• 
  Karnataka RERA asks Ozone Group to repay homebuyer's home loan, clears all liabilities on buyer
• 
  India turns 2nd fastest-growing data center market in Asia-Pacific with 28% growth in capacity

Follow our latest coverage on Diwali and Samvat 2080 here

Others in the field say over the last few years, the momentum of NRIs completing their purchases in the fourth quarter has increased significantly.

Saurabh Garg, co-founder of proptech unicorn NoBroker, said the majority of NRI transactions happen on their platform between October and December—more than 20 percent in October and November, and between 30 and 40 percent in December.

"Other than being auspicious for housewarming occasions, the last quarter of the year provides a key window for them (NRIs) to come to India owing to major holidays over Christmas and New Year. Today, even for sale documentation, they need to come to India," he added.

Realtors add that the banking sector remains upbeat when it comes to homebuyers, including NRIs, and developers are foreseeing a positive outlook during the festive season. "We are expecting substantial growth this year, building on the strong demand in the real estate sector with the company posting a growth of 30-40 percent increase in sales value in Q1FY24," Bhavik Bhandari, chief sales and marketing officer at Mumbai-based real estate developer Ashwin Sheth Group.

Bengaluru, Mumbai top choices for NRIs

A recent survey conducted by NoBroker found that 29 percent and 24 percent of NRIs prefer to invest in properties in Bengaluru and Mumbai, respectively.

The report, which surveyed more than 12,000 NRIs, found that by 2025, NRIs will contribute to 17 percent of investments in Indian real estate, up from 15 percent currently.

This increase in NRI investment can be attributed to various factors, including their strong emotional connect with their home country, a desire to secure the property for future use, and the favourable policies introduced by the Indian government to attract foreign investments.

The drawbacks

Even as there is an upswing in NRI sentiments during the festive season, several problems continue to plague the offshore investors.

The survey pointed out that more than 82 percent of NRI buyers have identified lack of information and transparency as major challenges when navigating the Indian real estate market, highlighting the pressing need for improved accessibility and clarity in the property purchase process.

While maintaining properties can be a struggle for several investors, the NoBroker survey points out that most of them have resorted to property management companies to service the apartments, a choice of 52 percent of the people surveyed.

"However, for rental purposes today, we see substantial month-on-month growth for hassle-free online transactions and rental agreements. More than 80 percent of rental agreements on our platform are being done online," Garg added.