In an interesting twist in the post-COVID-19 real estate landscape, NRIs are once again scouting for Indian luxury homes. As per ANAROCK’s latest consumer survey, at least 73% of NRIs now prefer properties priced between INR 90 lakh to INR 2.5 Cr. In the pre-COVID survey (H2 2019), just 41% preferred properties within this price bracket – most favored affordable and mid-segment homes. 3 and 4 BHK options currently top their wish-list.

The IT hubs of Bengaluru (24%) and Pune (19%) are seeing the highest NRI demand. Collectively, these two cities saw approx. 48,370 homes sold in 2020 – accounting for a 35% sales share among the top 7 cities.

Prashant Thakur, Director & Head – Research, ANAROCK Property Consultants said, “The COVID-19 pandemic has increased NRIs’ emotional association of long-term security with physical assets. 63% of the polled NRIs state this as their reason for buying homes in India now. They are also driven by the uncertainties posed by COVID-19. Luxury properties have emerged as a hot favorite with NRIs because of the depreciating rupee value translating into greater buying power, coupled with ongoing developer discounts and offers. A majority of NRIs is buying for end-use, not as investments.”

According to the survey, at least 67% of the polled NRIs are looking for ready-to-move-in homes. If we consider the overall survey trends (including NRIs and resident Indians) just 29% preferred to buy RTM homes, with another 27% respondents preferring under-construction properties that will be delivered within a year.

Of the total 24% survey respondents who already booked properties in the last six months, at least 38% were NRIs looking to make the most of the prevailing market conditions in India, including discounts, offers, and lowest-best home loan rates.

86% of the polled NRIs will only consider properties by branded developers who have the highest project completion capabilities, resulting in the lowest execution risk. Another reason for this choice is NRIs’ desire to buy into projects with international-grade amenities.

According to the survey, most of the polled NRIs seeking property in India are aged between 35-45 years of age. Among all NRI respondents who participated in the survey, close to 68% considered real estate as the best asset class for them at this time.

Regarding their outlook on residential property prices, at least 44% of respondents felt that prices will remain stable in the short-term (i.e. 12 months), while 27% feel they will increase during the year. Over the long term (i.e. in 5 years), 92% of NRI respondents think prices will increase.

About the author- Prashant Thakur, Director & Head – Research, ANAROCK Property Consultants