India’s real estate market a hotspot for foreign investors

The Indian real estate sector has seen remarkable growth in recent years, and Non-Resident Indians (NRIs) have played an instrumental role in this expansion. Rising demand for the luxury home sector, rent inflation, and the depreciation of the rupee are some of the most prominent factors fueling the demand for Indian real estate.

The Indian real estate industry is showing strong signs of growth, even as the global real estate industry continues to recover from a period of stagnation. The market size of the Indian real estate industry in FY21 was indexed at $200 billion USD and is expected to reach $1 trillion USD by FY25. This growth is expected to contribute to 13 per cent of the country’s GDP.

The preference of NRIs and other High-Net-Worth Individuals (HNIs) to invest in luxury real estate in India has been a growing trend for many years. Various reasons influence their investment decisions, including the urge to come back ‘home,’ a lifestyle that adapts comfortably to the global best, evolving demographics, improving property standards, and offerings from reputed Indian developers.

Another significant growth driver is the potential for high ROI that luxury homes offer, along with the prospect of generating substantial rental income. NRI’s increasingly allocating their resources to acquire larger properties in their country of origin, buoyed by government support and enhanced purchasing capacity. The housing segment witnessed significant NRI investments in 2022, particularly in high-value properties, given the declining value of the country’s currency against the US dollar.