Working abroad means a better pay packet, a major portion of which is earmarked for investments. And as far as an NRI is concerned, India still remains the best investment option. The reasons for this are several. Many NRIs plan to ultimately come back and settle in India. At times, the investment could even be made for families back home. Secondly, it’s often considered best to have a contingency in case of unforeseen circumstances. Thirdly, investing back home helps diversify financial assets, and investing in real estate still remains the popular option considering the low risks and steady growth rate.

A report released by proptech unicorn NoBroker estimates that NRIs will make up 20 per cent of the country’s real estate sector investments by 2025. NRI interests in the Indian real estate market has remained steady over the years. The automatic route which allows NRI investment without permissions from authorities could have also contributed to this increase in interest. The automatic route allows NRIs wishing to purchase residential or commercial properties to do so just like a regular resident Indian.

This surge in demand is substantial when contrasted with the pre-Covid-19 period when it remained in single-digit figures. In 2019–2020, NRIs accounted for approximately 10 per cent of total investments in the real estate market. While the United Arab Emirates topped the list of number of NRI property buyers in India, the US and Singapore followed. NRI preferences lean towards Bengaluru and Mumbai with 29 per cent choosing the former and 24 per cent favouring the latter. World-class educational institutions, a cosmopolitan culture and a successful startup system have resulted in better rental yield in Bengaluru. And this has in turn made the city a good investment destination.

Similarly, Mumbai, the country’s commercial capital, is also highly sought after. NRIs have always found its commercial, residential and luxury properties appealing. A 35 per cent year-on-year (y-o-y) increase in NRI investments in the residential market was seen over the past year. Preference are for more spacious and versatile living spaces as is evident from the increased demand or 3 BHK units, surpassing the demand for 1 and 2 BHK units. The average investment falls between Rs90 lakh and Rs1.5 crore category with 26 per cent actively seeking properties exceeding Rs1 crore according to NoBroker.

The real estate sector is not without its own challenges. According to the report, 82 per cent of NRI buyers have identified a lack of information and transparency as significant obstacles. This calls for an urgent need for improved clarity in the property purchase process.