Is it now a good time to invest in Indian real estate? Is real estate a profitable investment in India? These are a few concerns shared by foreign investors or NRI investors who are interested in Indian real estate. The answer is, indeed it is a good time to invest in Indian real estate and the sector is looking up. What makes real estate investments in India lucrative? Are these benefits focused on a particular segment? The post aims to answer these questions.
A Discussion on Real Benefits of Real Estate Investments India
The real estate in India has been attracting foreign investors for various reasons such as the ones discussed below.
- Real Estate Investment Offers Great ROI: The right real estate investment at the right time offers great returns to investors. For instance, the Government of India has initiated a project, where 100 cities are being developed into smart cities. Pune is one among them, and one of the fastest-growing Smart Cities in India. The real estate investment in the city will assure you great returns. The risk factor associated with this investment is nearly zero because this city attracts people from all parts of India, who come here for seeking high paying IT jobs.
- Better Asset Value: Hardik Patel, an NRI, who made a real estate investment in Pune in 2008, is today a happy man. He confirms that although he has invested in several other cities, however, the real estate in Pune is a big bang. He had invested in multiple properties in Pune in the 2000s, and have largely benefitted from real estate boom here. He has sold a property in Hinjawadi and earned a good value due to increased appreciation. The real estate in Pune offers better asset value than any other investment.
- A Source of Steady Income: The suburbs of Pune such as Hinjawadi attracts several job seekers to this city. Most times, these job seekers prefer living closer to their offices. As a result, the rentals have gone up in the area, and it offers a steady source of income to investors.
- Tax Benefits: In recent years, India has signed double tax avoidance agreements (DTAA) with several countries. This allows NRI taxpayers to avoid taxes in their country of residence, and pay only taxes in India where the property is located. The NRI investors can claim a deduction of 30% on the property taxes, and interest deduction on the home loan.
Luxury Home Sales Going Up
Now, coming to the question, is there a particular segment that is experiencing a boom. The answer is yes, the luxury home segment is experiencing a boom. A study suggests that sales for luxury and ultra-luxury homes have gone up in 2018 and 2019. This is all due to reforms in the real estate sector introduced by the Government of India such as GST and the Real Estate (Regulation and Development) Act.
A study by ANAROCK confirms that NRI’s are keen to invest in luxury homes for two reasons – for their personal use or eyeing the long returns of investment. Also, NRI investors have immensely benefited from currency depreciation in recent years. This combined with changed government policies has contributed to the boost in the home segment.
It is seen that NRI investors are keen to invest in their home markets and fast-growing cities such as Pune. Most NRI investors come from North America, followed by Singapore, Dubai, and Europe.
In Pune, there has been a good appreciation of property prices in areas like Hinjawadi, still, luxury homes are affordable for NRIs.
Seeing these trends and advantages, it can be confirmed that real estate investments in India are a good deal because the country is offering maximum benefits to real estate investors.