No incentive for NRIs to invest in Indian property

Track2Realty Survey: The recent policy changes and much touted reforms might have helped to change the perception of NRIs towards Indian real estate a bit, yet a global survey by Track2Realty finds it is not enough to goad them to put in money.   

NRI, NRIs, Non Resident Indians, Indian Diaspora, NRIs investment in Indian property, NRIs investment in real estate, NRIs rules for investment, NRIs property search, India real estate news, Indian realty news, Real estate news India, Indian property market news, Realty Plus, Realty Fact, Track2RealtyIt is more of bad news than good news for the developers as far as their efforts to entice the NRIs is concerned. The good news is that the outlook of the expat Indians towards the Indian real estate is changing; the recent policy reforms have made them more optimistic about the property market back home. But the bad news is that they are yet not ready to commit for property purchase in India.

Nearly two third, as many as 62% NRIs, are not ready to commit investing into the property market anytime soon. The reasons might be different but nearly everyone, 84% to be precise, maintain that there is no incentive to embrace Indian property as a key investment instrument.

Nearly half of the respondents, as many as 48%, feel the property prices are too high in India; 34% would wait for market to be more transparent; while 18% have other reasons, including lucrative opportunities in other global markets.

These are the findings of a global online and off-line survey by Track2Realty. Track2Realty conducted this survey online, and then its global alliance partners also conducted on-ground sampling in many countries.  

The NRIs from the US, UK, Middle East, South Africa, Canada, Australia, New Zealand, Malaysia, Singapore and Mauritius participated in the survey. They were given a mix of open-ended and close-ended questions to assess their investment choice in the Indian property market. The data was then collated by Track2Realty team to read the mood of the NRIs vis-à-vis their investment choice in the Indian property market.

“I have my doubts over many of the claims made in the media reports. I have my friends and family back home and the feedback I am getting from the ground zero is that the market is yet to clean up. There are more unscrupulous deals in property market than the clean & transparent deals. Over and above that, the property prices are inflated and it is better to be safe than sorry, says Vasim Afdab who is working in Saudi Arab.

What is the time frame that these NRIs feel when the Indian property market would be transparent and lucrative for investment? Well, the opinion is divided but a large share of respondents, 58% to be precise, believe it would take 36 more months. 26% even maintain it would take another five years; while only 16% NRIs feel the Indian property market would be in a better shape in the next one year.

It is not just the policies but its implementation that deters nearly seven out of ten, 68% NRIs. They maintain that the grievance redressal mechanism in India is pretty poor, and it would take years to get justice.  

“Even though the intention of the government would be right to reform the property market and streamline the processes, the overall system in India is just chaotic. Once you land up in a wrong deal it would end up taking its heavy toll in the bureaucratic and legal corridors. Indian real estate will never attract the kind of investment it should because the Indians who are exposed to transparency in other countries would not trust the market back home,” says Indrani Guha in US.

Do these expat Indians think that public listed real estate companies have a better track record of delivery and promises kept? Surprisingly, more than half 56% of these NRIs maintain that being a listed company is no guarantee of meeting the consumer expectations. Some of the non-listed developers were rated higher than the listed large size developers.

“I bought one apartment last time in Bangalore with a non-listed but reputed developer and my experience has been pretty good. This time I had to cancel my plans with a listed developer in the same market because the company failed to honour its commitment and the sales team kept changing its version. It is more about the developer’s intent than being a listed player,” points out Dev Prakash from Dubai.

Survey Highlights 

62% NRIs are not ready to invest in Indian property

84% NRIs don’t find Indian property to be lucrative investment

Nearly half of the NRIs find property prices too high in India

58% NRIs wish to wait for 3 years; 26% 5 years; and 16% One year 

68% expat Indians are apprehensive with policies where grievance redresseal is poor

More than half of NRIs, 56% feel a listed developer is not necessarily more transparent 

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