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NRIs expect best practices in property market

Posted on by Track2Realty
Track2Realty Global Survey

Track2Realty Survey: Lack of best practices in Indian real estate is what deters the NRIs who have intent to invest.

NRI, Non Resident Indians, Indian Diaspora, PIO, Persons of Indian Origin, NRI investment in India, NRI investment in real estate, NRI investment in property market, NRI investment pattern, Where are NRIs investing, India real estate news, Real estate news India, Indian realty news, Indian property market, Track2Realty, Track2Media ResearchNearly all the developers in the Indian real estate are chasing the Non-Resident Indians (NRIs) but very few have succeeded in attracting the investment of expat Indians. Reason: They have tried to hard sell the properties without actually understanding what these fellow Indians living abroad want.

As a result, the mismatch between the NRIs expectations and the builders’ offerings is so huge that Indian real estate fails to tap the potential of this affluent set of buyers.

The overall track record of the sector is anyway poor with no less than 84 per cent of the expat Indians maintaining that the opaque realty market of India scares them.

Among those who have invested into the Indian real estate the satisfaction level is pretty low with only 38 per cent of them happy with the project and the builder.

If the market adopts the best practices then a large share of the NRIs, as many as 72 per cent are ready to invest back home, notwithstanding the economic outlook or the cycles of macro-economic ups & downs. With the given market dynamics not even one-third, 34 per cent, are ready to commit to make any investment in the Indian property market.

“No other market could be as tempting for investment as one’s home country from both the rational and emotional standpoint. It is the market to bet on for ROI (Return on Investment). But then the prevalent mindset of taking the buyers for a ride is something that is scary. I don’t want my money to stuck and I keep waiting endlessly in a market where commitment either ends as foul play or in litigations,” says Shashikant Ramachandran, an NRI in Dubai.

Which are the top brands in the Indian real estate that the NRIs trust? The answer in order of preference is:

  1.     Sobha Ltd

  2.    Godrej Properties

  3.    Puravankara Limited

  4.    Prestige Estates

  5.    Oberoi Realty

  6.    Embassy Group

  7.     Brigade Group

  8.    DLF

  9.    Tata Housing

  10.                   K Raheja Corp 

What precisely do these NRIs expect from the Indian property market? Well, their concerns and wish list are not very different from the resident Indian buyers in terms of the quality of projects or the value for money.

But where they find disconnect the most is the absence of hand holding during the entire process from buying to occupying. No less than two-third, as many as 62 per cent complain that the developers’ sales team behave differently during the pre-purchase and post-purchase.

More than half, 57 per cent, demand that the documentation of the developers, including the Offer Letter and the Builder Buyer Agreement should be foolproof document that clarifies each and every detail, including the legalities, government policies and tax implication part.

“Even if I hire a lawyer for due diligence the developer can still play foul if one is not conscious of its brand reputation. For me, a genuine builder is one who provides me the due diligence in right earnest. I recently invested in Bangalore with a developer whose team documented everything like a true professional agency. Best of all, my friends & family back home says their market reputation is exemplary,” reveals Sudha Chandran, an NRI from Boston.

What is their top wish list with the Indian developers? Nearly three-fourth, 72 per cent demand an online option to get their apartments customized as per their needs. Nearly as many, 70 per cent want to be involved in the design and construction phase.

78 per cent assert that mere uploading the construction status is not enough for them to trust the intent and processes of the developer. Rental assurance is always on top of the mind of 60 per cent of the NRIs.

How far would they pay a premium for brand? Nearly all, 92 per cent of the NRIs are ready to pay for a reputed developer. They wish to play it safe than sorry. A large number of them, 80 per cent, even maintain that the property shows in their country of work by the Indian developers only matter to them as project information guide.

Road shows or the advertising campaigns by the lesser-known developers only tempts to 28 per cent of the NRIs, and that too if the developer also has to offer something exclusive along the way.

Best practices & gaps 

Reasons of trust deficit—84% Opaque market, 16% Regulatory issues

Outlook on project & builder—38% Happy, 46% Unhappy, 16% Not sure before delivery

Trust gainer—72% Ready to invest it best practices followed, 28% Wait for bot economy & regulatory improvement

Investment in today’s market—34% Yes, 58% No, 08% Depends

Satisfaction index while purchasing—62% Sales team unprofessional, 28% Builders’ direct involvement missing, 10% Other reasons

NRI’s wish list—57% Fool proof documentation, 24% Strong due diligence, 19% Online help

Online needs—72% Customization option, 18% Live video streaming, 10% Documentation verification

Project-specific demands—70% Involve buyers with design & construction, 20% Inputs must be incorporated, 10% Fit-out as per demand

Satisfaction with online construction status upload—78% Reject 14% Better methodology needed, 08% Satisfied

Rental Concerns—60% Rental assurance needed, 34% Rental leasing model by developers, 06% Not sure

Ready to pay brand premium? 92% Yes, 08% Depends

Relevance of property shows abroad—80% Only for project information, 14 Somewhat useful, 06% Very useful

Road shows by developers—28% Tempting only with exclusive offers, 52% No, 20% Depends 

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