RERA restores NRIs’ confidence in real estate projects back in India

Delays, Lack Of Transparency Were Hurdles

Nisha.Nambiar

Pune: After years of indecisiveness, the implementation of MahaRERA has helped Qatar-based Shibu and Josy Thomas make up their mind to invest in a realty project in Baner.

With Josy’s parents from Pune, the couple have been looking to invest in a project here for the last few years. “We always wanted a home in the city, our birthplace. We will finally have an investment in the realty sector and can do it with confidence,” Josy said.

Another US-based couple, who did not wish to be named, said they have asked their relatives to look for investment in the real estate segment here. “My sister-inlaw, who would hesitate to invest in Pune till the other day, has asked us to be on the look out for RERA-registered projects,” said M Rao, whose brother and sister-in-law are in the US.

Non-resident Indians have been traditionally attracted to investments in the real estate sector because of currency exchange rate and easy laws for investments by NRIs under the Foreign Exchange Management Act. These potential buyers appear to have become all the more confident to invest in the post-RERA days.

Credai-Maharashtra president Shantilal Kataria said they were getting online inquiries NRIs and their exhibition in the coming month is a proof that the buyers were more confident of investing in the sector with RERA in place. “We are not hesitating to reach out to them,” he said.

Earlier, the lack of transparency in the realty sector, delay in execution of projects, no update from builders, misleading marketing strategies and the absence of accountability were some of the fears expressed by NRIs . Kataria said RERA took care of most of these issues.

Puranik Builders MD Shailesh Puranik said, “The NRIs are now inclined towards investing in residential projects — be it in the micro or luxury segment — because the act (RERA) allows the investors monitor all activities. This creates a transparency in transactions and provides better scope of attracting NRIs.”

Anuj Puri, chairman of Anarock Property Consultants, said the Indian real estate sector evokes a lot of interest from NRI investors. “This interest is driven by long-term fundamentals such as emotional connect, safeguarding retirement plans, better returns and yield on investments and depreciation in the rupee’s value. While there are around 30 million NRIs across the globe, investment in the Indian real estate is led by NRIs from the US, UAE and Saudi Arabia.”

Between 2000 and 2014, he said, NRI investments in the Indian real estate reached substantial levels ranging between 10% and 18% a year. But there was a drop because of the slowdown in the market from 2015 and that continued till last year.

“Besides, there was a slew of reforms and policy changes such as demonetization, RERA and GST. The combined effect was a decrease in investments by the NRIs in the sector. The worst hit was residential real estate market. But after RERA, the sector is finally reviving,” Puri said.