Latest Property News on 'Non Resident Indian (NRI)'

Indian HNIs Prefer India for Real Estate Investment

The Indian HNI (high net worth individual) is being aggressively wooed by foreign developers. With the balance of economic power shifting towards Asia, and with India projected to be the world’s third largest economy by 2050, and a subsequent increase in the number of wealthy individuals , property consultants from across the globe are making a sales pitch, and also getting the HNI segment interested enough to buy. HNIs are people with net financial assets (liquid assets) of at least $1 million, excluding primary residence and consumables. Data from consultants like Cap-Gemini and Merrill Lynch suggests that India has the youngest HNI population in the Asia-Pacific region, with the club having even 28-year-olds on their rolls.

Strong GDP growth, robust figures in industrial and service sectors, high market capitalization , and steady FII inflows are some factors contributing to the rise in HNI wealth. In 2006, India’s HNI population crossed the 1 lakh figure, which made it the second-fastest growing HNI segment in the world, after Singapore, where the growth was 21%. If one were to analyze the asset allocation of Indian HNIs, data suggests that while equities make up the greatest portion of India’s HNIs’ portfolio at 31%, 17% of their investibles are in real estate. “If you were to look at the total pie of investment by Indian HNI, only 2% of the investment from Indian HNIs is going in overseas real estate ,” says Samantha Jerath, a director at Jerath Properties, Delhi-based real estate consultant having a portfolio of many HNIs. He adds, “Barring Dubai and London, I do reckon (investment taking place in) any other place due to cultural differences, unfamiliarity with local laws, language issues.” Read More »

Realtor Arrested for Cheating NRIs

A man, wanted by city police for allegedly cheating NRIs to the tune of Rs eight core by luring them to invest in a non-existent hotel project in Karnataka two years ago, was arrested in Kolkata on Wednesday. Joseph Chacko, a city resident, against whom non-bailable warrants were issued by a court, was arrested by a team of Bangalore Police, Joint Commissioner of Police (Crime) Alok Kumar said tonight. The Central Crime Branch police, who were searching for Chacko, were tipped off about his presence in a hotel in Chennai. But by the time a police team reached the hotel, Chacko had left for Kolkata by air. The team reached Kolkata and arrested Chacko, Kumar said. He was produced before a Kolkata court which permitted the police bring him here. He would be brought to the city by a flight, police said.

Chacko and three others were accused of luring NRIs from Bahrain and United Arab Emirates to make investments for construction of “Crown Plaza International Hotel and Resorts”, supposed to come up in Hennur. The investors were promised a seven-day stay in the hotel and also some share in the earnings of the resort. Chacko had advertised the project in the Gulf News daily. As many as 150 NRIs invested with 76 of them getting “sale deeds”. The investors later realised they were being conned and filed a complaint with the then Chief Minister H D Kumaraswamy in May 2007, which was forwarded to the city police. As many as 40 cases against Chacko were registered in Hennur, Kothanoor, Hoskote, Nandagudi and Sulebele police stations. Three persons were arrested and police were searching for Chacko, facing non-bailable warrants in five cases. Read More »

Political Stability Can Bring Back NRI Interest in Indian Property Market

India’s thumping electoral victory will mark the return of confidence and also funds to the Indian real estate sector, says Sukhraj Nahar, chairman of Nahar Group, “Having a stable government at the centre should provide a bottom to the Indian real estate market and help turn it around. Improved economic sentiment and rallying stock markets should bring back confidence,” explains Nahar “The positives have been visible in the recent past. At the MCHI Property 2009 Exhibition in Mumbai last month, we had done a ‘teaser’ for this new product, last fortnight we launched it – and have logged 300-plus sales. Now, with political stability clear for the next five years, we expect sales to grow faster,” he says.

Nahar’s statement reflects the sentiments of developers across the Mumbai Metropolitan Region, where the past few months have seen a good number of bookings. According to Nahar, the biggest motivating factor for NRIs to buy property at the Indian Real Estate Expo that is on till June 6 in Dubai, will be the political stability that follows the second term of Prime Minister Manmohan Singh. “We have been getting enquiries from NRIs ever since the poll results were announced,” he explains. “The moment it was clear that political stability was ensured, NRIs reacted and started the process of buying a home in India. In the local market too, we find ‘fence sitters’ have turned active buyers, it augurs well for real estate,” says Nahar.

NRI Community Comes in Support of the Realty Sector

Notwithstanding the impact of slowdown on realty sector and even after demand for flats up to Rs 30 lakh and 40 lakh and above really hit a new low, thre are still ready buyers for independent houses. These hardy customers don’t take much time to grab an independent house in any good locality and location. These deep-pocketed guys always look for such properties.

According to realty experts, though not many such properties come up for sale, but once they do come up, there are several buyers staking claim over them. And if the house is free from all kinds of disputes and the title is also clear, a seller need not worry he has to wait very long to meet a customer for his house, says Titu Sethi, a South Delhi-based realtor , who has played a key role in sealing many deals involving bungalows and kothies. Read More »

FIIs and NRIs Invest in Indian Equities

Foreign institutional investors on Monday made a net investment of Rs 79.88 crore in Indian equities, even as the BSE’s benchmark index slipped 193.44 points to close at 11,682.99 level. FIIs were the gross purchaser of shares worth Rs 1,622.80 crore, whereas they sold equities worth Rs 1,542.92 crore resulting in a net buy of shares worth Rs 79.88 crore, as per the provisional data available with the Bombay Stock Exchange. On Friday, FIIs had made a net investment of Rs 1,240.60 crore, according to the latest data available with the market regulator Securities and Exchange Board of India (SEBI) shows.

However, domestic institutional investors booked profit and sold shares worth Rs 17.31 crore. Proprietors also offloaded a net Rs 46.28 crore shares in the market, according to the BSE data. Meanwhile, brokers, on behalf of their clients, and non-resident Indians (NRIs) followed FIIs and made a net investment of Rs 54.79 crore and Rs 0.31 crore respectively. The BSE’s 30-scrip Sensex today slipped 193.44 points or 1.63 per cent to close at 11,682.99 level.

NRIs Investing in Residential Projects

Last year, after RBI spelt out clear norms for NRIs to invest in property, and with NRIs holding Indian passport no longer requiring prior permission before investing, there was a spurt in NRI investment in Indian realty. According to Omaxe’s Rohtas Goel, “The policies set out by the government regarding property investment and repatriation, has made investments in India more favourable. NRIs can acquire residential/ immovable property in India, rent it out, transfer or sell it, if required. However, the regulations do not permit the NRIs and PIOs to acquire property like agricultural land, plantations and farmhouses. Moreover, GOI is allowing 100% repatriation, so NRI’s can now also take out the rental income and capital investment in the property outside India, subject to the foreign exchange regulations.” One noticed that NRIs, including young professionals, technology workers and domain-specific consultants invested in property back home, both in the semi-premium and premium categories.

One, they wanted to have a house of their own in their home country if they decided to return and the house covered both investment as well security factors, and two, this could be used as their holiday home, which stayed fully furnished and was used for a few weeks annually. However, with the market downturn, the scenario changed completely. Even though there has been increasing remittance, to the tune of $30 billion now, and it topped list of countries in the world in 2007 (according to World Bank study) where expatriates remitted money to their home country, real estate has received a small pie of the total investment. According to NRI Prashant Tandon, who is wary of parking his funds in real estate, “Indian real estate was overvalued all along, and now it is closer to realistic levels. I do not think I want to put money on a riskyasset class. I would much rather put it in some safer instruments, eg fixed deposits, bonds or blue-chip companies.” However, developers say NRIs are investing more in residential projects, compared to retail or office real estate, after the recent home loan interest rate cuts and price cut by developers.

Making Property Investment Simpler for Non-Residents

As property markets fall world-wide, one of the few consolations for real-estate investors is that some governments have become more open to nonresident property owners. A growing number of them are considering loosening or temporarily suspending foreign property-ownership restrictions in a bid to stimulate their real-estate markets. In January, for example, Beijing issued a one-year suspension of a one-year residency requirement for foreign nationals buying a house. The Cayman Islands and Australia have also recently loosened their rules. Meanwhile, the issue is being discussed in numerous other countries, including the Philippines. Loosening foreign-investment restrictions isn’t new. Governments have been attempting to stimulate foreign investment for years in response to swelling interest from international investors. In 2005, India began letting foreigners invest directly in Indian residential and commercial real-estate development. And in late 2006, the government lifted a required 10-year lock-in period on repatriating property sale proceeds, although it’s limited to $1 million a year.

Slumping property sales has given the issue renewed urgency, as countries strive to find ways to stimulate local economies. Last month, the historically foreign-investment-friendly government of the Cayman Islands temporarily lowered rates on their real-estate transfer “stamp duty” taxes, including a reduction to 5% from 7.5% on waterfront property. At the same time, the country’s real-estate brokers group, Cayman Islands Real Estate Brokers Association, announced a 20% rebate on commissions. The discounts last through Sept. 30. Restrictions on foreign ownership exist mainly in emerging property markets. Most Western European countries, including the U.K., France and Italy, don’t restrict foreign nationals from owning real estate. (Notable exceptions are Switzerland and Austria, which have established some foreign-buyer quotas to keep prices down in some ski towns.) The U.S. doesn’t restrict foreigners from buying property. Read More »

Better Return on Savings for NRIs

Non-resident Indians, who keep their surplus cash in rupee-denominated non-resident external (NRE) and non-resident ordinary (NRO) savings accounts with Indian banks, will receive higher returns. This follows a decision by the Reserve Bank of India (RBI) to calculate the interest on a daily basis from April 2010. Interest is currently calculated on a monthly basis. Indian bankers in the UAE said the move would be a boon for NRI customers but would increase the cost of raising funds from deposits for Indian banks.

And they said the decision would make short-term deposits of 15 to 60 days less attractive because customers would receive almost the same interest rates from NRE and NRO schemes while enjoying the benefits of a savings bank account. The RBI said in its credit policy notification: “We advise that on a review, and in view of the present satisfactory level of computerisation in commercial bank branches, it is proposed that payment of interest on savings bank accounts (NRE and NRO) by scheduled commercial banks would be calculated on a daily product basis with effect from April 1, 2010.” Read More »

Irish Property Investors Seek Clarification over Delayed Projects

Hundreds of Irish property investors are seeking clarification over delays and confusion surrounding two Indian real estate developments. Some 245 Irish investors who have bought a total of 294 apartments in two off-plan developments near Delhi in India through a Dublin-based investment company Kuvera in the last two years are concerned that they have not been completed. The real estate investors, who have paid between €34,000 and €42,000 per unit on the Orchard View and Mountain View developments, are trying to get a refund but they are not able to find out what has happened to their money.

Kuvera, which is the name of the Hindu god of wealth, is run by former stockbroker Kieran Murphy. The investors say that when they contacted Kuvera’s Dublin offices they were given a statement which said that they had contracted directly with the local Indian developer, VG Buildtech, when purchasing their properties. ‘At no time has there been any contractual relationship between the investors and Kuvera (Irl) Ltd,’ the statement said. It said that that they should contact Kuvera Properties (India) Ltd as it is the management company based in India to oversee the progress of the development and the financing of the development. Read More »

Roadshow by Realtors to woo NRI Bengali’s

City realtors are set to woo the non-resident Bengali community in recession-hit North America with their first “comprehensive” real estate roadshow in that part of the world.

Credai Bengal, the state chapter of the national umbrella body of real estate developers, will hold the realty expo during the North American Bengali Conference (NABC), scheduled for July 2-4 in San Jose.

“We have been going to the NABC every year in bits and pieces, and we felt that doesn’t do justice to the real potential of the city as an investment destination and the wide array of real estate products now available here. Hence the decision to stage a full-fledged show,” says Pradeep Sureka, the president of Credai Bengal. Read More »