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Weak rupee, pent-up demand spur NRI investments in Indian realty

Higher rates unlikely to deter Gulf NRis from buying property in their home country

In the last couple of years, there has been a spurt in non-resident Indians (NRIs) buying property in India, primarily releasing pent-up demand after the Covid-19 pandemic and the weakening of the Indian rupee. While the higher interest rates may lead to some weakening of demand from domestic buyers, Gulf NRIs are unlikely to be affected by this issue, Aakash Ohri, group executive director and chief business officer, DLF Ltd, told Khaleej Times.

Excerpts from an interview:

How has weakness in the Indian rupee affected Gulf and UAE NRIs’ investments in Indian real estate?

For NRI investors from GCC countries, Indian real estate has always been a market with enormous opportunities. Residential real estate provides the NRI community with a unique opportunity to convert their hard-earned foreign income into profitable investment opportunities in India. In the last two years, we’ve seen an increase in the number of NRIs looking to buy a home in India, and pent-up demand has begun to emerge. Post-Covid and the weakening of Indian rupee has further pushed the investment from UAE based NRI’s in Indian real estate. NRI investments in DLF projects currently range between 12 and 14 per cent, and we intend to substantially upsurge that contribution in the coming years. Furthermore, NRIs in the Middle East are optimistic about the Indian market, special provisions such as streamlined tax regime, indexation benefits, cheaper house loan interest, favourable currency movement, digitisation of procedures, and transparent rules further attracts them to invest their surplus money in India.

With high-interest rates likely to continue for a while, how will this affect India’s real estate sector?

The real estate industry in India may experience a variety of effects from high-interest rates. On one hand, it may lead to a decrease in domestic buyer demand since they’ll be put off by higher mortgage rates. NRI investors from the GCC who are seeking to invest in Indian real estate, on the other hand, are unlikely to be much impacted by this since they may have access to more affordable financing options. Furthermore, real estate investments in India offer NRIs protection from inflation and exchange rate changes. The rupee’s decline has been encouraging NRIs to investing in Indian real estate.

In terms of projects, do NRIs prefer luxury projects or mid-range?

While demand is widespread throughout regions and product categories, there has been a significant increase in demand for homes in the luxury segment and above in projects that provide amenities at par with international standards. The luxury high rise condominiums located in Delhi and Gurgaon have always been the NRIs’ first choice. We recently witnessed record breaking pre-formal launch sales of Rs80 billion for our luxury high-rise residences, The Arbour, located in Gurugram. This project has a substantial investment made by NRI’s especially NRI’s based out of UAE. We are now gearing up for the launch of the last tower of our luxury project The ONE Midtown located in the heart of national capital is the part of DLF Midtown which is planned to be one of the biggest integrated developments in West Delhi. ONE Midtown boasts of 4 towers soaring to 39 floors each, offering its residents panoramic views of the acres of greenery surrounding it. The 913 spacious and elegant apartments, come with a choice of two, three or four bedrooms.

Which are the cities being preferred by NRIs of late for investing in India?

While the six metros continue to be the top choices for NRIs among Indian metropolises, investors, however, have recently begun to focus on emerging towns like Chandigarh, Panchkula, Goa, and Kochi. Holiday homes as an investment area has emerged as a hot favourite among NRIs are homes beyond metro cities, as a quick getaway, within driving distances of metros. Among metros, NCR continues to attract a major portion of NRI investment. Gurgaon especially has become a popular investment destination for NRIs and expats owing to its well-developed infrastructure and thriving social fabric, and presence of commercial hubs for business.

Is DLF offering or planning to offer special schemes for NRIs to promote their investments in a big way currently or going forward?

We have a dedicated team that has been put in place to facilitate the engagement with Indian diaspora living abroad, to keep them fully informed about not just the latest developments in DLF, but also the industry at large, introduce them to our latest offering, and also offer them real time support, across all time-zones to help them with any queries towards their investment decision.