The interest among non-residential Indians (NRIs) in purchasing under-construction properties in India has renewed following the implementation of new real estate law RERA, that aims to protect home buyers from fly-by-night developers, a study realty portals Housing and Makaan.com said.
“Project delays in the past resulted in investors shying away from under-construction projects. From being the hot favourite of the NRI buyer segment, under-construction properties went on to take the back seat. This trend, however, is beginning to change – thanks to the real estate law,” the report said.
Earlier, the preference ratio for ready-to-move-in and under-construction properties was 67:33, but now the ratio stands at 56:44, it added.
Meanwhile, the goods and service tax (GST) on under-construction flats has also been reduced from 12 per cent to five per cent, for affordable housing, it has been reduced to one per cent from eight per cent, while ready flats attract nil GST.
Realty portals PropTiger, Housing and Makaan are part of Singapore-based Elara Technologies, which is backed by News Corp and Softbank.
A stronger dollar has renewed NRI interest in India’s property markets, the report said, adding that the leads and visits on Housing and Makaan.com have improved by 30-40 per cent from last year.
NRIs from the United States (US), the United Arab Emirates (UAE), the United Kingdom (UK) and Singapore are seen having the keenest interest in Indian realty, and form about 55 per cent of the buyer base, the US alone accounts for 26.5 per cent of the bulk of users while the UAE and Singapore each account for 9.1 per cent of the user base each.
While the most significant number of users is from the US, there is a phenomenal growth in the number of users from Singapore, Malaysia, Kuwait, Canada and the UK. Other countries from where NRI users have expressed interest in the Indian market include Hong Kong, Bahrain and France.
“Real estate has got a fresh lease of life after major structural changes such as the real estate law, the goods and services tax and demonetisation. Investors have expressed renewed interest, as they are more confident about regulatory practices in the country now,” said Mani Rangarajan, Group Chief Operating Officer, Elara Technologies.
Among cities, Hyderabad has received the highest NRI search sessions, followed by Mumbai and Bengaluru. Other cities where NRI buyers are actively looking for properties include Pune, Gurgaon, Noida, Ahmedabad, Ghaziabad, Vadodara, Kochi, Goa and Faridabad.