The government has liberalized investment norms for NRIs to invest in real estate in India. At the same time there is a need of adhering to ground realities before reducing into investment. Reserve Bank has granted general permission to certain financial institutions providing housing finance to grant housing loans to non-resident Indians for acquisition of residential property and commercial property for self occupation subject to certain conditions.
Authorized dealers have been granted permission to grant loans to non-resident Indian nationals for purchase of house or flat. However, repayment of the loan should be made within a period not exceeding 15 years out of inward remittance.
The real estate industry in India is undergoing a self organization from being a highly unorganized sector. This has been one of the most crucial factors for India gaining its status as a highly favored real estate investment destination through foreign direct investment - FDI and funds. India has a huge real estate market potential. But then it is based on purchasing power parity.
- It is the fifth largest economy in the world (ranking above than developed countries.)
- It has the third largest GDP in the entire continent of Asia.
- It is also the second largest among emerging nations.
Returns from real estate investments in India have consistently performed well and even out performed the other investment options. However, easy home loan availability by financial institutions in India, NRI remittances and repatriation procedures has emerged as the best of all the available prospects for the NRIs looking forward to return to India.
The government policies set out regarding property investment and repatriation, has made opportunities of real estate investments in India even more favorable. Under the present comfortable conditions, Non-resident Indians - NRI and persons of Indian origin - PIO can invest in real estate in India. NRIs can buy residential or immovable real estate in India, rent it out, transfer or sell it, if required.
The NRI may use his own funds to acquire immovable real estate property; other than the option of availing home loan from bank for this purpose. The NRI's ‘own funds’ refer to the money received in India by way of inward remittance from overseas out of income earned overseas, personal savings outside India.
NRI real estate investment has been on a sharp rise in the recent few years. This can duly be accredited to the incredible growth in the Indian real estate sector. India being the fifth largest economy in the world and the second largest among emerging nations has shown a prospective development in real estate investments destination for the NRI population.
Special grants and services are also provided to the NRI population to attract more and more foreign investment. All the leading banks and financial institutions have separate NRI dealing services that cover NRE, NRO bank accounts, housing loans and other home loan related products.
The contribution of the Indian Government and other factors to the attraction for NRI real estate investments sector of India includes:
- Sale of land for residential, commercial and industrial development.
- Infrastructure support for the real estate development all across the country.
- Promotion of NRI investments and FDI.
- Policies for transparency and facilitation of real estate transactions.
- Liberalization of rules by Government of India and Reserve Bank of India regarding NRI property and NRI homes investment.
- No restriction on the maximum number of real estate properties that can be bought.
- Easy finance availability on residential property, commercial property, 3 BHK luxurious apartments, 3 BHK lowrise luxurious apartment. Simpler repayment processes like normal inward remittances or debit in their NRE or NRO bank account.