India’s real estate sees investment boom, courtesy Gulf NRIs

With crude oil prices rising to over $90 per barrel, GCC nations have seen GDP growth rebound sharply as demand for energy has increased globally. This has translated to firmer job prospects and salary hikes for Indian workers who form a major part of the migrant workforce in these countries

The Indian real estate market has been witnessing a significant boom in investment from Non-Resident Indians (NRIs) based in the Gulf region over the past year, according to reports. Benefitting from the post-pandemic economic recovery and growth seen in major Gulf economies, NRIs are investing surplus funds from their salaries and businesses back home in India’s property sector, reported businessoutreach.in.

Several key factors are driving this surge in NRI real estate investment. Strong economic growth in Gulf Cooperation Council (GCC) countries like the UAE and Saudi Arabia has boosted the earnings and savings of Indian expatriates living in these markets. With crude oil prices rising to over $90 per barrel, GCC nations have seen GDP growth rebound sharply as demand for energy has increased globally. This has translated to firmer job prospects and salary hikes for Indian workers who form a major part of the migrant workforce in these countries.

At the same time, the Indian economy has also regained momentum after being hit by the COVID-19 pandemic. With consumer demand and business activity picking up pace, the outlook for Indian real estate has brightened considerably. NRIs are confident that domestic property prices will continue appreciating given India’s strong long-term growth potential. The government’s push for infrastructure development and affordable housing is further attracting NRI investment towards residential and commercial real estate projects.

According to leading brokers and consultants in the Gulf, over half of their current real estate clients in India are NRIs seeking to capitalize on the market upswing. A major developer in Mumbai said 45% of total sales in 2022 came from NRIs, up from just 15-20% in the pre-pandemic period. Similarly, transactions involving NRIs have more than doubled in the luxury housing segment across major cities.

• Many firms have rolled out digital marketing initiatives, virtual property tours and flexible payment plans tailored to the needs of Gulf-based investors

• Some have even set up regional offices and customer interaction hubs in key GCC locations

• As the India-Gulf corridor for trade and investment continues expanding, stronger synergies between NRI homebuyers and domestic realty players can be expected to further fuel the ongoing property market boom

While residential properties remain the top choice for most NRI investors, there is growing interest in other asset classes as well. Office space, warehousing facilities, data centers and industrial parks catering to sectors like e-commerce and logistics are attracting larger investments from Gulf-based Indian businessmen. Some large NRI consortiums have even partnered with local developers on ambitious mixed-use projects in major urban centers.

The strong NRI inflow of funds is providing a timely boost to India’s realty sector, which had been subdued for several quarters during the peak pandemic phase. With overall sales and new project launches witnessing a significant uptick, this external commercial investment is generating renewed optimism among industry stakeholders. Moving forward, experts anticipate the current NRI investment momentum to sustain over the medium term given supportive macroeconomic conditions and attractive risk-adjusted returns from the Indian market.

While NRI investment has emerged as a major growth driver, developers are also exploring new measures to make real estate more accessible and convenient for Non-Resident customers. Many firms have rolled out digital marketing initiatives, virtual property tours and flexible payment plans tailored to the needs of Gulf-based investors. Some have even set up regional offices and customer interaction hubs in key GCC locations. As the India-Gulf corridor for trade and investment continues expanding, stronger synergies between NRI homebuyers and domestic realty players can be expected to further fuel the ongoing property market boom.

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