Uncertain sentiments in GCC Prompting NRIs to Invest in Indian Real Estate

The Gulf Cooperative Council (GCC) which comprises Bahrain, Kuwait, Qatar, UAE, Saudi Arabia & Oman has seen phenomenal economic growth in recent years underpinned by a rise in hydrocarbon exports, continuous drive towards diversification & surge in fiscal spending. Since 1998, the average annual economic growth in the region is to the tune of 5.2%.

However, in recent years a slowdown in oil prices & cap on production has a drag on economic growth. In 2019, the GCC’s real GDP growth has been forecast to 0.8%, easing out from a growth of 2% during the previous year. Many markets within the GCC have decoupled from hydrocarbon growth to an extent, yet oil exports continue to play a major role in regional capital flow. Hence a shrink in energy exports is not auguring very well for the regional economy. Moreover, despite attempts to diversify, global trade wars, doldrums in international financial markets & slowdown in China have also muted growth in non- oil exports. The markets are also reeling under the pressure of shutdowns due to the COVID outbreak.

GCC members continue to maintain a strong fiscal position & growth prospects in the foreseeable future look robust. However, the recent slowdown has started to impact the general sentiments. Most of the major organizations in the region have either made some job cuts or have at least put a hold on further hiring. The slump in the job markets is most prominent in the high & mid-high income segments. Hence, even if the economic climate improves in the foreseeable future, it might not be completely risk-averse.

As the uncertainties are picking up, residents are looking to alternate options of investments to hedge against any potential risk. Since local Real Estate is itself going through a rough time, the expatriate populations living in the region is pivoting to their home countries. Amidst such readjustments of capital flows, NRIs living in the GCC region are investing in Indian Real Estate in big volume. In the previous financial year, total NRI investments into the Indian housing market amounted to USD 5 billion. This year, as per research by 360 Realtors, it is expected to grow further by 10%.

Traditionally, Indian expats living in GCC prefer to have a home in India as there is no residency policy in the region. However, as the regional growth sentiments are moderating, many NRI buyers are purchasing property (or properties) with the intent to mitigate possible risks. Attractive home prices in India, the plethora of discount options by developers & weakened rupee are further enticing NRIs to buy homes in India.

To learn about the pulse of NRI investments into Indian Housing Market, download our latest research report-

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