Investing in Indian real estate can be significant for a number of reasons such as the Potential for High Returns, Diversification of Investment Portfolio, Stable Income, Tangible assets, long-term asset, Growth of the Indian Economy, etc. Overall, investing in Indian real estate can provide investors with a range of benefits.
In addition to this, the Indian real estate market has shown strong growth over the past few years, with property values increasing significantly in many cities. Investors have the potential to earn high returns on their investments. Also, In this huge growth, Non-Resident Indians (NRIs) have played a crucial role due to hybrid work arrangements in India.
There are several reasons why Non-Resident Indians (NRIs) are investing in Indian real estate:
In India, The depreciation of the rupee has led to an increase in demand for housing as NRIs aim to invest in real estate and protect their investments against currency fluctuations.
Real estate investments against currency fluctuations
Real estate investments can serve as a hedge against currency fluctuations, particularly for investors who reside in different countries or have exposure to multiple currencies. When an investor purchases a property in a foreign currency, they are essentially locking in the exchange rate for the amount of their investment. This can protect them against currency fluctuations, as the value of the property will remain the same in the local currency regardless of exchange rate fluctuations.
For example, suppose an NRI investor purchases a property in India using USD when the exchange rate is 1 USD = 75 INR. If the exchange rate declines to 1 USD = 70 INR, the value of the investment in USD terms will increase, providing a hedge against the decline in the value of the INR.
Certainly reports also reveal a significant increases in the Indian real estate market from both domestic and NRI buyers like foreign investment in Indian realty has surged from approximately USD 3.2 billion during 2011-13 to USD 7.6 billion during 2014-16 i.e. remarkable growth of 137%.
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