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5.3

Investing In Real Estate In India For NRIs

Last week, my mother was pleasantly excited as she prepared a host of dishes for dinner.  Reason?  Well! Her NRI brother had come from California after a number of years and was expected to come home for dinner. Even as I sat across my maternal uncle to make polite conversation, I soon realized that the far away look in his eyes indicated how much he missed India. He had settled in California with the hope of earning a better living and providing a better future for his children. However, he sorely missed his family and friends whom he had left behind, while he migrated to another country altogether. That’s when I suggested to him the possibility of investing in a property in India.

Apart from the emotional factor of investing in India, the important reasons for buying a property NOW are given below:

  • The Indian Rupee has continued to slide against the US dollar. From INR 52 for each US dollar about a year ago, it has depreciated to around INR 59. Nevertheless, this indicates that your 1 US dollar is equivalent to almost INR 60 in India. Hence, when you convert your dollars to Indian Rupees to buy a property, you need that much less dollars to make your investment.
  • Real Estate prices have been steadily increasing in India. Although everyone has been waiting for that imminent correction to take place, it has not yet happened. India faces the issue of a large population, which has resulted in space constraints. Further, lots of projects have got stuck in a logjam due to delay in getting approvals and clearances. However, even as the price graph moves upwards, we are nowhere close to the sky high prices seen in the year 2008 before the Lehman debacle. Thus, there is plenty of room to earn a neat return on your investment.

 Residential real estate returns as per Residex data, 2007-2012

Source: Residex – NHB (NHB kept the base year as 2007 and started the index at a value of 100.)

  • The government is in the process of passing the Real Estate bill. This bill, once enacted, will see significant reforms in the real estate sector in India, which, in turn, will improve the investment climate for this sector.

Don’t miss this opportunity. Buy a property in your home country today.

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