As an NRI (Non-Resident Indian), investing in Indian real estate can be a lucrative option, but it’s important to understand the current state of the market and the various factors that can impact your investment. Here are some key real estate statistics that NRIs should be aware of when considering investing in the Indian real estate market.
- Property prices rose by 7% in 2022 in top 8 cities, expect single digit growth in 2023
Major cities in India such as Mumbai, Bengaluru, Delhi, and Hyderabad have witnessed a steady rise in property prices. This trend is expected to continue, making it an opportune time for NRIs to invest in Indian real estate.
- Gurugram: saw the highest surge of 13 per cent to ₹7,000-7,200 per square feet.
- Delhi NCR : The prices of residential properties rose 9% to ₹4,800-5,000 per square feet. Among two major markets of Delhi-NCR, Noida witnessed a growth of 7% to Rs. 5,400-5,600 per square feet.
- Bengaluru: In the southern markets continue to rise, like in Bengaluru, the rates were up by 9% to 6,000-6,200 per square feet. While, Chennai also grew by 5 per cent to 5,600-5,800 per square feet.
- Mumbai: saw an increase of 5% in housing prices to ₹10,100-10,300 per square feet. The housing prices in Pune rose 8% to ₹5,500-5,700 per square feet in 2022 compared with the previous year.
- In 2017, the rental real estate market was pegged at one crore units and was valued at $22 billion (Rs 1.53 lakh crore). By 2023, its volume is expected to be 1.8 crore and valuation $41 billion (Rs 2.85 lakh crore). Read more at: Economictimes.
- Average housing prices up 38% in last decade:
Average property prices in the top seven cities in the last decade (2010-Q1 2020) saw a close to 38 per cent jump. The average price of a home in the top 7 cities rose from approximately Rs 4,063 per sq ft in 2010 to Rs 5,599 per sq ft by Q1 2020.
- NRIs can avail home loans in India for up to 80% of the property value: NRIs can avail home loans in India for up to 80% of the property value, with interest rates ranging from 6.95% to 7.50%. This can help NRIs to finance their real estate investments in India.
- Income and educational qualifications play an important role in deciding the maximum amount of loan available to an NRI. Banks allow an advance of 80-85% of the value of the property, subject to the Gross Monthly Income (GMI) of an individual. Maximum amount of loan granted, is in the range of 36-40 times GMI.
- Tax exemptions on capital gains:
NRIs can benefit from tax exemptions on capital gains from the sale of a property in India if the sale proceeds are reinvested in real estate within a specified period. This can help NRIs to save on taxes and potentially reinvest in Indian real estate. Long-term capital gains are taxed at 20%.
- long-term capital gains earned by NRIs are subject to a TDS of 20%. NRIs can claim exemptions under Section 54, Section 54EC, and Section 54F on long-term capital gains. Therefore, an NRI can take benefit of the exemptions from capital gains when filing a return and claim a refund of TDS deducted from Capital Gains.
In conclusion, the Indian real estate market presents a promising investment opportunity for NRIs, with favorable government policies, growing demand, and the potential for good returns. However, it’s important to conduct thorough research and seek professional advice before making any real estate investments.