LPCurry's Blog: Cut in RBI repo rate will boost NRI investment in Indian realty

We do not see any downturn in the market; in fact we are quite bullish. Primarily catering to the mid-housing segment, we feel that the scenario for Indian realty is rather positive. Following the current trends, the rising growth in the middle class segment in India brings with itself a
rising demand for homes. Currently this segment is growing at a rate of 9% every year and is expected to grow at least for the next 20 years.
This will lead to a major increase in purchasing power which will eventually lead to more demand for mid segment homes.
While this poses as an excellent opportunity for developers, it also serves as a great opportunity for investors in the real estate sector as developers will direct their efforts towards bridging the gap between demand and supply.
In fact, we feel that right now it is the best time for NRI’s to get a good return on their property in India as the recent repo rate cut of 50 basis points by RBI has made home loans cheaper and therefore it’s a good time to invest in property right now. In the NRI community, a maximum
demand is observed for residential apartments as they are looking for an investment in property as a second home rather than from an investment perspective. Most NRI’s have started purchasing apartments in India even without concrete plans of shifting back just in order to keep a base ready incase they decide to relocate a few years from now. Also, factors like commercial prominence, proximity to Delhi, increased net profitability, good connectivity are some of the reasons what makes Delhi NCR favorable for NRI investments.
In the last few years, Gurgaon has witnessed tremendous growth in terms of appreciating real estate value due to the NH8 expressway, recent metro rail link and the upcoming Dwarka expressway or National Periphery road (NPR). All of this plus the growth of commercial sectors near Gurgaon has given a boost to development of the real estate properties which in return has increased NRI investments in this sector.
Since August last year, the NRI investment in this region has cumulatively increased by 40%. The steady growth in the mid housing segment is further expected to increase NRI investments in India. Keeping these points in mind, it is positive that this scenario is definitely favorable
for investment opportunities, not only for local investors but also for NRI’s looking to invest in real estate in India.