According to real estate consultancy Vestian, the inflow of capital into Indian real estate from international investors plummeted 30% to $2.73 billion last year. In comparison, the flood from domestic players increased more than twice as much to $1.51 billion.
According to Vestian statistics, total institutional investments in real estate fell 12% to $4.3 billion in 2023, from $4.9 billion the previous year.
According to the consultant, investments from foreign funds declined 30% yearly due to their cautious approach, while investments from domestic investors increased by 120%.
Domestic investors invested $1,511 million ($1.5 billion) last year, compared to $687 million in the 2022 calendar year.
However, the influx of foreign money was smaller last year, at $2,733 million, compared to $3,926 million in 2022.
As a result, local investors boosted their participation to 35% in 2023 from 14% in 2022.
Shrinivas Rao, CEO of Vestian, stated, “Despite uncertainties in demand throughout the real estate sector, investments remained healthy throughout the year. Domestic investors’ optimism kept the real estate market healthy, as they believed in India’s economic story. Although investments fell to a five-year low in 2023, Vestian predicts a rebound in 2024 on the strength of the Indian economy’s strong growth and a large pipeline of planned infrastructure projects.”
“Stabilizing world economy, robust economic growth in India, huge domestic consumer base, growing emphasis on work-from-office policies, and favorable government policies such as National Logistics Policy and Make in India initiatives are likely to attract foreign and domestic investors to actively participate in India’s growth story,” according to the report.
Rao stated that the Indian real estate business is quickly expanding as new asset classes develop, necessitating increased funding requirements.
“The increased demand for money may result in significant returns on investment for investors.” Rao believes that investors may inject funds into the industry in anticipation of substantial returns.
In 2019, institutional investments in Indian real estate totaled $6.5 billion. The inflow totaled $5.9 billion in 2020 and $4.8 billion in 2021.
Foreign real estate investments entail buying and managing properties situated outside of the investor’s native country. Investors can buy residential, commercial, or industrial properties directly, through partnerships, or real estate investment trusts (REITs).
