The onset of the COVID-19 pandemic had pushed real estate back to the drawing board. Essentially real estate is more of a necessity and not a luxury as people need homes, businessmen need establishments, and corporates need office spaces. The pandemic induced fears and thoughts such as is it a good time now, and if at all one should look at investing in real estate or not, are bothering the potential buyers. During the past few weeks, buyers have become more active and there is a growing demand from NRIs, despite the economic slowdown globally.
This is mainly because time after time, the real estate industry has proven to be an attractive asset with relatively more robust returns. Besides, with improved affordability in the current scenario, it has gained the attention of both locals and NRIs across the world. With the dollar gaining strength against the rupee, a competitive marketplace with negotiations tougher than ever, and a spirit of moving back to the motherland, are among the few reasons why developers have experienced a sudden rise in enquires from international clients while the industry faces uncertainties. Several international brands are considering India over China as their favored destination for production and business. India is anticipating some major influx of global investments, that will influence various industries. It is the NRI investors who have always been the first to forecast such trends and hold the first-mover advantages.
In the current scenario, while many are considering moving their bases back to India, some of them want to invest in their home cities as they enjoy a sense of security in a familiar territory. UAE, USA, UK, and Canada are the biggest source of NRI investment in India, with 42% of the total inflow coming from solely the GCC region. Although having spent a significant part of their work-life in these countries, citizenship is not a choice available to the Indians in the Gulf region, which brings them back to India when it comes to investing in real estate assets.
Before the COVID phase, the investment inquiries have been about residential, commercial, and retail real estate focusing on benefits from returns in the form of rentals. But now most inquiries have come regarding residential properties from the ultimate end-users. The demand is not confined to luxury properties alone, but spreads over to other segments ranging from affordable and mid-segment housing to premium luxury properties, notably in cities of southern states of India, followed by New Delhi and Mumbai.
Converting these NRI leads to sales
The lockdown has manifested the challenges the industry will face in days to come, not just with the way they deal with their customers, but also to run their operations internally. Real estate has always been extremely dependent on leading face-to-face transactions to closing a sale. But with new social norms in practice, the tech-enabled real estate firms will gain maximum market exposure, notably when it comes to international clients.
Digital sales drills will enable brands to replicate and reap the benefits of physical interaction as it will exhibit more convenience and flexible operations. This new mode of transacting can be taken forward to a post-COVID society as well.