Will demonetization affect the investments of NRIs?
NRIs who are thinking to buy a property in India; this is the ideal time for them to do so. Especially, in the wake of the recent demonetization drive by the government.
The recent demonetization drive from the government which banned the use of 500 and 1000 denomination notes to be used as a legal tender is also likely to help the real estate sector to grow. The notes of the mentioned denominations were mostly unaccounted and were used to buy resale properties, thereby affecting new projects. Now, all projects will have a level playing field which will be beneficial in the longer run.
Moreover, Owing to the demonetization drive the deposits in the banks have grown on a handsome scale. This will help in the recapitalization of banks and will bring down the overall fiscal deficit. This will in turn lead to lowering of interest rates by the banks. Lowering of interest rates will definitely promote liquidity and thereby the customers will find it easier to avail a home loan from the banks. The NRIs can take advantage of this.
This is expected to take up the sales figures of the real estate sector as well. The lower fiscal deficits may also encourage the government to invest in infrastructure and low-cost housing schemes, thereby providing a boost to the real estate sector. From the NRIs point of view there are two angles which can be considered – those who are on the verge of their retirements and are looking to come back to India, may do so and buy a home for their own use. The investment of the government in the infrastructure will definitely lead to the development of facilities. With the development of various facilities the lifestyle of the people will also go up.
Secondly those NRIs who are thinking from the investment point of view will also be benefitted in the long run. The development of infrastructure and the upward moving lifestyle of the people are definitely going to push the value of their investments. They can expect a higher return on their investments. So, the change looks good.