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Are prospects Promising for NRI’s to invest in Real Estate?

Why should NRI invest at this hour?
* High Rental Yields: Offers A promising source of income -8-12% PA.
* Dip in Rupee Value: Better and corrected Values.
* Mid Term Capital Returns – Strong Influx and Fundamental Elevated Returns.
* Long Term Wealth Creation as historical figures show capital gains in real estate have been manifolds.
* Global trade war and unrest.
* Steep dip in oil prices.
* Investor friendly flexible payment plans.
* Better research times as digitally active industry.
* Branded Fundamentally strong developers.

Why will Indian Real Estate grow? 

The whole world is losing faith and trust in China. Sunami of firms that will choose to relocate from china in partial or full capacity.
One of the next best options for the world as a whole would be India, which provides the most skilled workforce at the lowest cost.
India incorporation is all set to grab this opportunity. 
Make in India, and Startup India will give an extra push.
India might become the Manufacturing and Export hub (Like China) in the next five years, which would create a large no of Jobs.

The global movement to India will result in increased demand for real estate be it commercial, Industrial, SEZ, ITES or Residential.
Stock Exchanges / Gold have shown high volatility for investment.
Indian Government have taken steps to provide liquidity to NBFC’s for economic revival.

Through targeted efforts both from the public & the private organisations, the Indian manufacturing sector can be set for higher growth trajectories & deepen its foothold internationally. It will also help in economic growth in the country & positively boost the demand for commercial & residential Real Estate. 

As there are strong sentiments in favour of reverse migration from across the globe be it Europe or the Americas
It will lead to a high demand in both affordable and premium Residential segments.
Many experts foresee this un-paralleled demand in Real Estate, and it makes it a lucrative deal for Investors as well as end-user. 
We anticipate a high ROI for residential and commercial real estate for a midterm horizon of 3-5 years.

Nevertheless, real estate returns are more rewarding than government bond returns. Therefore a continuous flow of funds can not be ruled out in the medium to long term.

The low-interest-rate environment and financial asset price volatility will support the case for portfolio diversification. ‘Flight to safety’ in real estate, which continues to offer better relative returns in comparison to other asset classes, looks set to increase.

Genuine-time for home buyers as they are at a unique junction where good deals on ready to move-in homes are available with never before payment plans. Research shows that out of the total unsold inventory in significant metros in the financial year 2019-20, a meagre 12 per cent of homes are ready to move in. 

It is expected that post the pandemic a majority of investors will feel that the real estate is still the most suitable option to invest, then comes the fixed deposit, gold and the stock market.

Price Correction:
As due to NGT bans on construction and COVID-19 lockdown, both have resulted in a delay in construction. At the same time escalation in prices of the raw materials and labour troubles, collectively will hamper the industry.
The challenging market already discounts these factors, and thus a maximum reduction of 10-15% can be seen.

The year 2019 was one of the worst years for the banking sector and amidst the recent turmoil even the SBI, the country’s largest lender, has reduced interest rates on savings accounts and fixed deposits; this has made NRIs averse of trusting the banks.

Every distress is an opportunity in disguise; every adversity is an opportunity to transform, many hidden opportunities for the sector are available amidst the current crisis. 

As a hard asset, Real Estate is a safe tool to invest in neutralising any possible inflationary pressure & mitigating market-induced risks. 
 

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