Favorable Market for Property Investment In India For NRIs

NRI Investment in Indian Real Estata Market

The stock markets tanking and the rupee depreciating against the dollar seem to be daily headlines of late. While the stock and currency markets rock, taking cues from global and domestic macroeconomic developments, the residential property markets seem set on a buoyant note. The rapid urbanisation, on the one hand, is pushing the case in cities, while the relatively more dependable property as an investment option is drawing more buyers on the other.
It is a given that property, especially in rapidly-developing cities such as Bangalore and Chennai, is bound to find demand across all price points. With more entrepreneurs moving into the city and employment opportunities expanding, the property sector is set to grow.
At this point in time, moving funds from riskier equity-based investment avenues to the stable realty space is an option worth considering. Just as in the case of equity, property too is a medium to long-term asset class for investors. A longterm investor will also find property to be a tax-efficient asset class that generates rentals in the interim period. The tax-adjusted returns on property works out higher given the fact that the capital appreciation property registers in the medium to long-term is high. On liquidity, while property is not as liquid as equity, these days equity too is a long-term option, especially in these turbulent markets. Yet, property in prime localities and those with premium brand tags are liquid, with demand for such options being on an uptrend constantly.
Given these factors, the upbeat sentiment in the markets with the Reserve Bank of India cutting the repo rate in the last Credit Policy, and expected downtrend in home loan interest rates, the investment climate is turning sunny for the property space. Investors in property have many options too with a variety of price points and options available across the board. The suburbs opening up with the connectivity being augmented is leading to significant inventory coming in for buyers. The rentals have recorded growth thanks to the commercial development around the city in the last couple of quarters too.
So who should be making a move now?
“Those with high exposure to equity should look at rebalancing the portfolio with property as an asset class in these times. Typically, property yields multibagger returns if held for around 10 years”, says Anil Rego, an investment consultant. “Another advantage of real estate is minimal volatility”.
Property is a comfortable asset class for many. “High net worth individuals who don’t face EMI pressures are looking at property in the current market conditions”, adds Anil.
Budget housing too is an option these days. “Budget housing is a volume segment. The ticket size is lower. It is therefore much easier to exit from a budget housing option. This option is good especially if the rental yield is relatively higher”, says Anil. Sites are known to deliver multibagger returns over time. “This option works best in the outskirts now. The property title has to be checked carefully though”, he explains.
NRIs who may have some plans of coming back at a later stage find this a good time to buy property. Also, fence-sitters are taking decisions now with the rupee over 53 to the dollar”, says Zahed Mahmood, a realtor in the city.¬†Property, a dependable hedge against inflation, is a safe avenue in these turbulent market conditions.
Source – TOI

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