NRI Prefer Non-Metros For Real Estate Investment In India – Here’s Why

Non-Resident Indians (NRIs) are a significant source of revenue for the Indian real estate market, with the majority of investment coming from the UAE, the USA, the United Kingdom, and Canada, according to a study by KPMG and Google.

NRIs are increasingly viewing small cities as profitable investment options due to their long-term return potential. Cities such as Chandigarh , Zirakpur , New Chandigarh , Panchkula , and many more are particularly enticing to NRIs.

According to the reports, the NRI real estate industry sales in 2019 were $11 billion. Since then, this category has witnessed a rising trend. In 2023-24, it will reach $14.9 billion and more according to the statistics.

This blog will explore why NRIs are shifting towards investing in non-metropolitan cities instead of favoring a bustling city.

The Current Scenario

The way non-resident Indians (NRIs) think about and look at the Indian property market has dramatically changed since the COVID-19 pandemic. Before, more NRIs were buying properties, but now working professionals are looking for properties to buy.

These professionals are not necessarily planning to retire in their hometowns, so their preferences and concerns have changed. Many NRIs have job insecurity in foreign locations, so they are willing to invest in top-tier cities for future business and job opportunities.

As a result, the areas around these top-tier cities are in high demand.

Statistics About Investment In Real Estate By NRIs

• 78% of NRIs want to invest in their hometown.
• 82% of NRIs would invest in their hometown for capital appreciation.
• 70% of NRIs planning to settle in India would take lower-paying jobs in their hometown.
• 90% of retiring NRIs want to avoid living alone among strangers.
• Top cities of choice for NRIs include Chandigarh, Mohali, Pune and Noida.
• 34% of NRIs prefer to invest in their hometown due to lower costs.
• 48% of NRIs invest in their hometown for quality of life and family bonding.

Factors Influencing Indian Real Estate Investment For NRIs

• Increase in standards of Indian real estate due to exposure to international housing standards and use of technology.
• Improvement in connectivity due to rapid infrastructure growth.
• Greater transparency in real estate transactions through Real Estate Regulation and Development Act.
• Consolidation in the real estate industry led to the growth of well-organized, top-quality real estate developers.
• Use of digital tools for real estate transactions, allowing for cost savings and faster process.
• The presence of technology and international expertise leads to high-rises’ solid construction quality and aesthetics.
• The decentralization of cities leads to an increase in options for real estate.
• NRIs show particular interest in certain cities such as Chandigarh, Mohali, Zirakpur.
• Digital payments and advanced technologies enable NRIs to streamline acquiring and transferring real estate properties.
• Increased flexibility of regulatory measures for NRIs.
• More Favorable investment conditions for potential home buyers.
• Scope for increasing demand for real estate assets in the present and future.
• Opportunities for cost savings and faster transactions through the use of digital enablers.

Final Thoughts

The real estate market in India is growing, especially for NRIs interested in acquiring properties in non-metro cities. Improved transparency, regulatory flexibility, and consolidation contributed to market growth. NRIs are motivated to invest in hometowns as capital appreciation, quality of life improves and the metro cities become increasingly saturated.

The market holds promise for both NRIs and local buyers with the potential for increased demand and long-term returns.