NRIs back in the domestic realty market, says Bhavesh Kothari, CEO, Property First

The Indian residential segment has seen a sharp rebound in the last few quarters, and the bull run is expected to continue across segments, including luxury homes. NRIs who stayed away from investing in the property are back with demand outpacing the supply, says Bhavesh Kothari, Founder & CEO of Property First, a luxury property consulting firm. He spoke of the growing need in the luxury home segment from the NRIs, affordability and potential investment hubs across the country. Following are the excerpts of Kothari’s chat with Realty & More.

Why is Indian realty a good investment option for NRIs?  

The impact of the Omicron wave was quite limited, and lockdowns relaxed mainly across the country. The Indian property market is at a growth stage and gives a healthy capital appreciation potential to investors considering the strength of underlying demand for property. The current growth is driven by the ongoing low-interest rate regime and attractive pricing offered by developers. While other economies are coming to a near-stagnation or a de-growth cycle, the Indian economy is bound to be growth positive for years to come. In addition, the associated risk of investing in the Indian property market will continue to go lower due to the improving supply-side eco-system, which has witnessed policy interventions like RERA and demonetisation.

What factors should one consider when investing in real estate in India?

The foremost thing to consider before investing in any asset class across the real estate is location. Other important aspects include the size of the property and the type of property (commercial or residential). Post the spread of the global pandemic, life has changed, and people are looking for more significant properties with good social infrastructure like schools, retail malls, hospitals and public transportation access. For commercial property, approach roads and clusters of office parks are of utmost importance.

What are the key locations in India to invest in residential real estate? 

The Indian residential market has been sketching a growth story for the last two years and has seen the strongest growth post the lifting lockdown across geographies. The sales performance of property markets of Bangalore and Mumbai have helped the residential apartment market in India record sales of close to 52,000 units in the January-March quarter, up 148% over pre-Covid average levels. However, some geopolitical factors give more advantages to a few locations than others. The upcoming smart cities like Dholera (Gujarat) and many more under pipeline are an excellent long term bet due to low real estate prices. In the western region, Mumbai will continue to grow due to capital and financial markets. At the same time, cities like Surat and Ahmedabad will move up the graph due to the economic development and shift of particular industries. Hyderabad, Chennai, Pune, and Delhi NCR are other growth markets. 

What are the reasons for the high demand for luxury properties among NRIs?

The NRI segment has contributed immensely to the resurgence in demand for real estate across the country. Those who were earlier looking at 2BHK apartments have started looking for 2.5 BHK, and people who were looking at 3BHK units want larger spaces. The work from home (WFH) concept has aided this trend. We see a significant rise in sales for bigger ticket sizes, with apartments priced over Rs 1 crore or higher recording an 83% growth in sales. Residential prices have also not seen a sharp rise and have gone up by 2-4% from a quarter ago in select micro-markets across all the top seven cities.  The last few quarters have been extremely promising for the luxury home segment, with cities like Bengaluru, Hyderabad, Chennai, Pune and Gurugram seeing high demand.