BUS 201109 HOMES INDIA-1604983192412
Whether it's Navi Mumbai or Chennai, developers are trying to drive up as much demand as is possible. Virtual tours and generous incentives are becoming commonplace. Image Credit: Gulf News Archive

The festive season in India has brought along it some welcome developments. For the housing market, an upward rally has begun, and buyers are actively scoping the market for good deals. Even investors are back - a clear indication that the sector outlook has turned positive.

In fact, NRI investors are once again bullish on Indian commercial real estate too, via outright purchase or fragmented investments. Sales figures for the third quarter of financial year 2020-21 reflect that residential sales more than doubled to 297.31 billion rupees, from 126.94 billion rupees in the second.

The market is expected to grow further by 35 per cent due to strong demand during the festive period. NRIs have been particularly active. Not only have enquiries and sales increased, the average ticket size of a home purchase has also increased.

Anarock’s average sales value of homes in Mumbai rose to 17.1 million rupees bought by Gulf investors during July to September 2020 compared to 5.8 million rupees in the three months prior. The overall average spend for home buyers in Mumbai since January 2019 stands at 12 million

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Cash in on the exchange

NRIs are spending 40-45 per cent more on their real estate investments because of a confluence of simultaneous factors – notably, the favourable currency rates, deep discounts and flexible payment plans. In Maharashtra, the state government reduced stamp duty and registration costs until January 2021. Cost of capital has reduced drastically due to lowest-ever home loan rates.

On top of all this, the work, study and learn from home culture has boosted demand for larger homes with the flexibility of added space.

Prefer the ready

Housing market traction has increased in all major Indian sub-markets. Bengaluru and National Capital Region saw increase in NRI sales in July to October as opposed to same period in 2019. NRIs are primarily seeking out options from Grade A developers who give them the assurance that their investments are safe. The highest demand is for ready-to-move projects and those due to be completed in 12 months or less.

Developers have stimulated the market with some extremely lucrative and creative offers. Products like pre-leased residences have been brought to the market. Rental assurance on residential properties has been another differentiated offering from some players.

Keep it low

Payment plans with low initial capital outlay has been another game changer as many buyers want to keep their initial fund outflow to a minimum. Schemes with assured returns and 10-90 payment plans have got traction.

The pandemic has altered the industry drastically. Site visits are now virtual and homes can be seen via virtual walk-throughs. With this, a previously significant barrier for NRIs has been removed. Also, ready-to-move products are available at similar prices to under-construction properties.

Prices are as low as they can get, and have not dropped further in spite of the pandemic. But developers are willing to negotiate. For NRI buyers, this presents unique opportunities.

- Shajai Jacob is CEO - GCC, Anarock Property Consultants.