Rising From The Rupee Fall: Why NRIs May Flock To Indian Real Estate

One of the most quotable quotes from preacher and philosopher Swami Vivekananda is, "weakness is sin". However, also true is the fact that one man's loss often proves another man's gain. With that as a prelude, it would not be hard to understand why a falling rupee that is giving the government a hard time – it is planning to soon launch an action plan to arrest the rupee fall – gives a certain class of investors a reason to cheer. 

The Indian currency has since the beginning of the year lost almost 13 per cent in value vis-à-vis the US Dollar. This has made investments in the country much cheaper for the Non-Resident Indians (NRIs), especially in real estate.

And that's not all. Since the sector is still in the revival mode after an almost half-a-decade slowdown, rates of property have not seen any dramatic upwards movement, making them even more affordable for NRIs.

What are the other factors that might contribute to more NRI investments in India's real estate in recent times?

Real estate legislation: While certain states have yet to do the needful, most states in India have successfully launched the framework for the effective implementation of the Real Estate (Regulation & Development) Act, 2016. State-specific real estate regulatory authorities are busy resolving homebuyers’ issues. This makes up for a positive change, and NRI investors’ confidence is India’s real estate, based on positive changes, is seen gaining ground once again.    

Ease of doing business: After assuming power in May 2014, Prime Minister Narendra Modi committed himself to ensure a better regulatory environment for India to move up in the World Bank’s Ease of Doing Business Index. India’s 30-notch jump in last year’s ease of doing business report is nothing but impressive - the country in 2018 secured the 100th rank for 2018, a big leap from its previous ranking of 130 among 190 nations.

For instance, several civic authorities have brought the whole home-buying process online. Unlike earlier, NRIs won't have to necessarily fly to India to complete the transaction.

Price upsides: Being cost effective is not the only incentive that NRI investors get if they put their money in Indian real estate. If data are any indication, property prices could witness an uptrend in the coming future. According to a research by the Harvard University, India may become the world's fastest-growing economy over the next decade. As the correlation between a country's economic growth and real estate growth is undeniable, Indian real estate is set to see a remarkable appreciation in value.

Growing workforce and rentals: Government schemes like Skill India will increase the migration of skilled workers to Indian metropolitan cities many times over, and this population will need housing, especially in the rental segment. For NRIs who invest here purely eyeing profits, this is a great opportunity. Further, the Centre has laid down guidelines to regulate the rental housing segment. All of these factors increase the chances for NRIs to earn higher rents on properties in Indian metros.