Trump to End Birthright Citizenship: Its Impact on the Indian Real Estate Market

A recent executive order from US President Donald Trump aiming to end birthright citizenship for non-permanent residents could have a significant surge in global markets. 

For Indian expatriates in the US, this change may prompt a return to their home country, bringing with them not just their skills but also valuable investments. As many look to shift their focus from the US to India, the country's real estate market will benefit. 

Impact of Ending Birthright Citizenship on the Indian Real Estate Market

As per experts, Trump's move to end birthright citizenship may encourage Indian expatriates to return home, shifting their investment focus from the US to India.

Indian real estate is expected to see positive growth, especially in Tier 1 cities like Hyderabad, Bengaluru, Gurgaon, and Chennai, as these tech hubs offer opportunities for returning residents.

This policy change is anticipated to trigger significant growth in the Indian real estate sector, as a rise in demand for both residential and commercial properties could lead to price appreciation and improved infrastructure development in these key urban areas.

Understanding the broader implications of this policy shift, it's clear that the Indian real estate market stands poised for a positive trajectory, catering to a growing demographic of skilled professionals returning home.

Overview of the Indian Real Estate Market

The real estate sector is globally recognised and encompasses four key subsectors: housing, retail, hospitality, and commercial. In India, it ranks as the second-largest employment generator, following agriculture.

In coming years this sector is expected to attract a growing influx of investment from non-resident Indians (NRIs) in both the short and long term. Among Indian cities, Bengaluru remains the most preferred destination for property investment, with Ahmedabad, Pune, Chennai, Goa, Delhi, and Dehradun also emerging as strong contenders.

India's retail, hospitality, and commercial real estate sectors are experiencing substantial growth, driven by the country's increasing demand for infrastructure and urban development.

Current Trends in the Indian Real Estate Market

The Indian real estate market is undergoing a transformative phase, driven by rapid urbanisation, rising incomes, and changing consumer preferences.

A. Growth Statistics and Market Dynamics:

• In 2023, luxury home sales increased by 75%, doubling their share of total housing sales. This indicates a good rise in demand for high-end properties.
• In 2024, India's real estate sector saw a 65% increase in land transaction volumes in the first nine months, reflecting strong investor confidence.
• By 2025, the real estate sector is projected to contribute 13% to India's GDP. According to the India Brand Equity Foundation (IBEF), the sector will grow at a compound annual growth rate (CAGR) of 9.2% from 2023 to 2028, reinforcing its crucial role in the country's economic development. 

B. Key Players and Investment Opportunities:

India's real estate market including commercial, residential, and industrial properties is witnessing rapid expansion. As the country strengthens its global economic position, it presents lucrative investment opportunities for 2025.

• Top cities attracting investors in 2025 include Mumbai, Bengaluru, Delhi-NCR, Hyderabad, Pune, Chennai, and Ahmedabad. These locations are gaining traction due to their infrastructure development, economic growth, and urban planning.
• When you are investing in real estate, important factors to consider include location, property valuation, investment purpose, time horizon, market trends, cash flow expectations, and potential returns.

C. Impact of Government Policies and Regulations:

The Indian real estate sector is a major contributor to the country's GDP and employment. Government initiatives like the Goods and Services Tax (GST) and the Real Estate Regulation and Development Act (RERA) have played a pivotal role in shaping the market.

• RERA: Enacted in 2016, the Real Estate Regulation and Development Act was introduced to address issues such as project delays, fraud, and a lack of transparency in the real estate market. 

Key features of RERA include financial accountability, timely updates, and stronger consumer rights. This has boosted buyer confidence, encouraged investment, and positively impacted home loan interest rates, making it convenient for potential homeowners to enter the market.

• GST: Goods and Services Tax (introduced in 2017) was a game-changer for the real estate sector, simplifying a complex and fragmented tax system. Before GST, real estate transactions were burdened by various taxes, including VAT, service tax, and stamp duty.

The introduction of GST has brought about standardized tax rates, input tax credit (ITC), and a push for affordable housing. It has increased transparency by reducing opportunities for tax evasion and streamlined compliance requirements across states, benefiting both developers and buyers.

Wrapping Up

As global and domestic citizenship policies continue to evolve, India is becoming an increasingly attractive destination for NRIs and foreign investors. So, the change in birthright citizenship policies in the United States can have a profound impact on India's real estate market. This shift could open up new investment opportunities and further strengthen India's real estate sector.