New Delhi: Indian realty sector is badly affected by the fall of 15-20 percent in residential capital values across tier II and III cities. In the context of this recent drop, the number of realty sales in the small cities has also decreased. However non resident Indians are not feared to invest in this sector.

According to The Economic Times, there is a drop of 30 percent in sales. As a result of this, the number of deals is also limited. These small cities include Agra, Jalandhar, Mohali, Ludhiana, Karnal, Panipat, Jaipur, Cochin, Bhopal and Raipur.

"The cause of this sudden fall might be the headwinds the Indian economy is facing," says Shweta Jain, Head of Residential, Cushman & Wakefield. The developers are not ready to start any new project as they want to complete the existing projects. As the developers do not want to reduce the prices because of the increasing input costs and the end-users wait for the prices to go down, the market is getting stagnant.

But it is a different picture when it comes to the Non-Resident Indians. They are ready to shell out a good amount to own a house in their own country. Report says that 10 percent of the total residential sales in the last six months are by NRIs.

NRIs are showing interest in cities like Pune, Mumbai, Chandigarh, Gurgaon and Kolkata. There are various factors that can be attributed to this scenario; sentiments attached to one's own country could be one among them. Indian Economy also offers attractive returns to their investment, says The Economic Times.

As studies show, Indian economy is suitable for investment. Global Real Estate Consultancy, Jones Lang LaSalle Meghraj (JLLM) reports that there is a significant growth of 10 percent in Indian Realty market. "It is no secret that the real estate market will soon permit low entry costs and high returns after the current property cycle is completed. Developers are responding to the demand," states Anuj Puri, Chairman and Country Head, JLLM.

According to The Economic Times, NRIs prefers tier II and III cities, whereas those who want to launch business in India opt for the metros. Developers invest a major portion in high quality interiors with 'green' and 'smart' home features to lure the NRIs.