What is the Impact of RERA on NRIs Investing in India?

Ashish M. Shaji

12 Dec, 2020

RERA Act is expected to bring revolution in the Indian real estate market. Earlier, the Real estate market was only regulated under local state laws. RERA will bring a great impact due to the compulsory registration at all levels. RERA is expected to bring a positive impact on the NRI real-estate investor in India. In this article we have described about Impact of RERA on NRI Investing in India.

Overview on RERA in India

The Real Estate Market in India has seen a steady rise over the years. However, instances of project delays and rising overhead costs have called for stringent measures to ensure that a governing mechanism is established to avoid loopholes in the industry. The anxiety related to the nature of a business, with its lack of information and scientific process of due diligence, a question had arrived for NRIs that whether they should invest in India?

Thus to boost investments in the real estate sector and to protect home buyers, the Real Estate (Regulation and Development) Act, 2016 was passed in the Parliament, which has led to the formation of the Real Estate Regulatory Authority (RERA^[1]). Under this, all real estate projects in each state and union territory will be monitored by the respective governing authorities thus ensuring much-needed transparency by providing various safety norms to the NRI investors.

Impact of RERA on NRIs: Reasons why NRIs should buy a property in India

The following reasons can be taken into account:

• Due to the demonization, the prices of the homes have slipped, resulting in lower interest rates on home loans.
• From an investor’s point of view, India is one of the most favourable countries for real estate investment for rental purposes, thus investing in Indian real estate sector will reap regular rental returns along with the appreciation and thus, NRI’s can buy properties as long-term assets.
• Purchasing processes have been simplified by amending several rules and regulations.
• Lenient FEMA policies and relaxation of laws by the RBI regarding property buying by NRIs are likely to boost their participation.
• Investment in Indian real estate is money-spinning for NRIs due to the difference in the value of properties as per the locations.
• The RERA Act has formulated various rules, regulations, policies, and schemes that have revived the economy resulting in maximizing the investment scope for NRIs.
• The RERA and easing of funds in the form of ECB, FDI, etc. have attracted the attention of reputed business houses and customers.
• With tighter regulations, greater transparency, more affordability, and enhanced price stability, NRIs will find interesting investment opportunities, as long as they have a long-term view of investing in the projects of India.

Conclusion

RERA Registration for all type of real estate business is all set to transform the realty sector and hence the consumers/investors will have a good time investing in a rich market like India which is having healthy norms and making the system more reliable, thereby ensuring greater transparency for NRI’s to invest in India. Thus, impact of RERA on NRIs is expected to be positive therefore NRIs can invest in India without any fear as RERA has been enforced in India.

Read our article: Analysis of Section 15 and RERA complaint provisions