NRI Investment in Real Estate After Demonetization.
The demonetization drive has made a huge impact on the real estate market. It has led to a more transparent purchase process that has helped build confidence among the buyers. The demonetization drive is expected to almost double the NRI investment in the real estate market in 2017. On the flip side, it’s been a challenge for real estate businesses to sell their properties. Builders and developers in Devanahalli, and property developers in North Bangalore are offering fantastic discounts to attract buyers. Though consumers see this as the right opportunity to buy properties at good deals, most of them are still confused about whether to invest now or to wait and watch for the price to come down further. NRIs have always favoured premium properties in Mumbai, Delhi, Bangalore, Chennai and other metro cities. They are looking forward to the Government amending rules and regulations for the redevelopment of old buildings in Mumbai. This will appeal to NRIs who want to buy and then rent out their properties. Post demonetization, Mumbai is expected to see 60%-70% slow-down in the real estate market, translating to better buying opportunities. Experts in the real estate market have predicted that there will be a 10%-25% price cut in the luxury residential property sector. The property transactions have dipped significantly post demonetization. The industry insiders have observed that the real estate companies in Chennai have already cut prices by 15-20 lakh. The Budget looks favorable for affordable housing market, with more focus on empowering the middle-class and lower middle-class buyers. This would have a positive impact on the housing supply in the secondary market. Currently, there is a slowdown in demand in the real estate business which has led to increased debt levels of property developers. But, soon the market is expected to go up, as the non-residential Indian investors are optimistic about investing in India. Indian nationals living abroad usually visit India during November and December and it is witnessed in the past that the NRI investment is more during January and February. As the budget was proposed in the month of February, the investment cycle is expected to change this year. People would prefer to analyze the real estate market post demonetization and budget, study the tax benefits and the revised interest rates, and then invest in properties. As a whole, the real estate market is anticipated to have a good growth in the year 2017. Overall it's a wait and watch game post demonetization but growth in the real estate segment looks favorable. NRIs with money to invest in the homeland are already investing or getting ready to invest, especially in properties developed by a well-known and reputed builder.