NRI real estate guide 2025
Explore key trends, investment strategies and opportunities for NRIs in India
Indian real estate witnessed significant growth in 2024 marked by high investments, all-time high office leasing activity, and rising property prices.
As for the Indian residential segment, 2024 has been a mixed bag because of the general and state elections through the year. Housing sales tapered by 2 per cent in 2024 in comparison to 2023, while new launches fell by 7 per cent because of the slowdown in approvals.
As for prices, if we consider data trends of the top 7 cities in the last five to six years, between 2019 to 2024, then average residential prices have seen the highest yearly growth in 2024 as against 2023. As per ANAROCK Research, the average property prices in 2024 witnessed 21 per cent yearly rise in the top 7 cities as against 2023 from Rs7,080 per sq. ft. in 2023-end to nearly Rs8,590 sq. ft. in 2024-end.
Growth in luxury segment
The surge in home prices can be partially attributed to the strong demand for luxury properties. This home segment has witnessed unprecedented momentum since late 2020, with several high-profile projects in Mumbai Metropolitan Region (MMR), National Capital Region (NCR), and Bengaluru achieving record sales velocities. If we consider ANAROCK data of homes priced less than Rs25 million there has been a 66 per cent jump in overall new supply in this budget category in 2024 as against 2023 across the top 7 cities.
Looking ahead, this trend is likely to continue into 2025. The luxury segment is poised for sustained growth, driven by several factors including the increasing number of high-net-worth individuals (HNWIs) and ultra-high-net-worth individuals (UHNWIs) in India. The steady appreciation in luxury property values, combined with India’s growing wealth creation and economic stability, is creating a strong foundation for sustained growth in this segment.
As per data, India is home to over 850,000 HNIs, with projections to double this figure to 1.65 million by 2027. Interestingly, 20 per cent of these millionaires are under 40, signalling the growing influence of young wealth creators. Meanwhile, the UHNWIs count reached 13,600 in 2024, marking a robust 6 per cent annual growth. This population is projected to soar by 50 per cent by 2028, far outpacing the global growth average of 30 per cent.
Top investment destinations
Among the tier 1 Indian cities, MMR, Delhi-NCR and Bengaluru may remain the most popular investment destinations in 2025 due to various factors including rapid infrastructure additions, job opportunities, and high demand for residential and commercial properties, both from locals and NRIs. If we look back, these cities witnessed substantial capital appreciation in 2024 and continue to remain buoyant markets. As per ANAROCK Research, the average residential prices in these cities witnessed yearly appreciation between 21 per cent to 30 per cent last year as against 2023 with NCR seeing the highest (30 per cent) increase.
That said, as things stand now, we may see average residential prices stabilising in 2025 and the growth rate at which prices grew in 2024 versus 2023 may no longer continue. But there will be a steady growth amid increased input costs and high demand.
Further, many Tier 2 and 3 cities are also gaining much prominence post the pandemic and continue to be major investment hotspots. Cities such as Ahmedabad, Mohali, Jaipur and Lucknow are witnessing rapid urbanisation, infrastructural development, and a rising middle-class population. These factors contribute to increased demand for residential properties here, making them attractive investment options.
Data indicates that average prices here are still reasonable here and range anywhere from Rs4,000 per sq. ft to Rs7,500 per sq. ft. With improved infrastructure facilities in these cities and continued affordable property values, there is higher scope for appreciation for the investors.
Besides residential and commercial real estate, other asset classes particularly warehousing is also likely to witness significant growth in 2025. There is substantial demand growing for the warehousing facilities across the country by the start-ups including various 20-minute delivery apps. Investment into this asset class could also reap higher ROIs.
All in all, Indian real estate remains attractive for both domestic and foreign investors and the trend will continue in 2025 as well. While there might be short-term challenges, the long-term trajectory appears positive, especially for projects offering unique value propositions. ■
The writer is Chairman – ANAROCK Group
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