MUMBAI, 06 JANUARY 2017: Indian Real Estate, for a Non Resident Indian, is not just an investment option – it has sentimental values attached. So, the NRI opting to buy, ‘a home, back home’ does more than just create wealth; he or she enhances the linkages with ‘home’. Undoubtedly, all the aspects of ‘buying real estate the right way’ come into play, and NRI buyers are no different.
CHANGES IN 2017: What will make a difference, as we get into 2017, is the changes that are under way: Indian real estate will be more transparent, real estate developers will work more on ‘corporate’ style, taxation on real estate will be simplified and regulation will become an integral part of how the industry works in India. In effect, the positives that a few companies ‘at the top of the pyramid’ used to offer will now be available across the industry. This will ensure that the NRI will not be ‘taking a gamble’ when he or she invests in Indian real estate – the new legal framework will make things so much more transparent, time-bound and increase accountability of the real estate developer whose project the NRI will invest in.
So, implementation of the legal set-ups being done as pert schedule, for an NRI buyer, the options will increase, the ‘safety net’ will widen and buying Indian real estate will become a safer and more secure experience for NRIs. And yet, some developers, some projects and some locations will continue to be at the top of any NRI buyers’ list – these are the reasons why:
FIRST FACTOR: The first factor will be reliability of the real estate developer. Here, aspects like (a) perception about the developer, (b) the past track record, (c) previously completed projects comprise the ‘report card’ where the ‘grades’ need to be proper.
SECONDFACTOR: The second factor will be the project itself. The first point an NRI would want to know is whether the project is getting a good response from resident Indians? Is the project being created within parameters of the regulatory frame work, is it likely to get appreciation at a faster rate than the average rate of the location?
THIRD FACTOR: Returns On Investment – ROI is not just about capital appreciation or rental income aspect, it is also about how safe the project is perceived to be from an ROI perspective - Is the developer one whose past track record is about picking locations that appreciate in value?
NRI PERSPECTIVE: The perception that Indian real estate is a win-win situation for NRIs will become a reality in 2017, as implementation of various laws and systems happens on a time-bound schedule. The alternative in form of other real estate hot-spots in global markets have been witness to slowing down of ROI, while the Indian real estate scenario sees potential for ROI to be enhanced.
In a nutshell, implementation of the Real Estate Regulatory Act; implementation of Goods and Services Tax as also other positive steps being taken by the Government are positives which should keep Indian real estate ‘positive’ for NRIs. Over the years, Indian real estate has been among the top investment options for NRIs. In 2017, political stability coupled with transparency in Indian real estate, as also the price points and favorable rupee movements should ensure that Indian real estate finds favor with NRIs.
~ Dr Niranjan Hiranandani is Founder & MD, Hiranandani Group. His recent initiative is Hiranandani Communities. He is the Founder and First President (Maharashtra), National Real Estate Development Council (NAREDCO), which works under the aegis of Ministry of Housing & Urban Poverty Alleviation, Government of India. He has recently been conferred with ‘Doctor of Philosophy in Management’ for his thesis, ‘Housing Revolution in India Challenges and Prospects’. Over the years, Dr Niranjan Hiranandani has been creating landmarks that set benchmarks, the ‘integrated township model’ of real estate development is his personal tribute to India’s real estate. He is a true visionary, and has been a pioneer in creating vibrant townships which have global standards.