India is thus zooming away in the
face of a real estate boom. There is property boom in any direction you wish to
see. Whether it is Bangalore, Pune, Calcutta or Chennai or Hydearabad or even
already sky high Mumbai and Delhi - the story is the same.
The concern is that Indian stock
market is at the height of a boom. So asset relocation is happening. Investors
are rushing to put their money in a safe place. Also, add the foreign exchange
glut in India fuelled to a great extent by software engineers parking their
dollar salaries in real estate. Relatively low interest rates over the last few
years made bank loans easier.
Indian government has also opened
the construction and property development sector for foreign direct investment.
They have allowed 100 per cent FDI in the vital infrastructure sector in order
to spur investment. And also for the first time it has thrown open the
lucrative parts of the Indian property market to global investors.
NRI interest in property market
The boom is also attracting interest
from Indian Diaspora in foreign countries. In recent years, NRIs have played a
very important role in transforming the Indian property market. Opening-up of
the Indian economy provided NRIs with new opportunities and they have shown a
great deal of confidence in it. They have invested a sizeable amount, of which
a big chunk in property market. Participation by NRIs has brought about a lot
of maturity in the market which in the past had solely banked on the actual
users.
Various lucrative avenues are being
created and offered to invite maximum investments from abroad. The NRIs have
responded quite positively, showing keen interest in India's real estate
market. NRIs are investing a lot in residential and commercial properties to
cash upon the increasing property demands.
Where the investment is allowed
in property.
NRIs are allowed to participate
in real estate investments by way of investments in variety of infrastructure
projects. It can be the construction of residential and commercial properties,
development of townships at city and regional level, constructing
infrastructure facilities like roads and bridges in urban areas and investment
in participatory ventures. The status of an NRI as a property owner is not much
different from the Resident Indian; just like any other property owner, NRIs
pay property tax to the concerned authorities, though NRI property tax is
slightly different from what Indian residents pay. So NRIs and also PIOs are
legally permitted to acquire any kind of immovable property in India, with the
exception of agricultural land, a plantation or a farm house.
Where to get funds to invest in
property.
NRIs can fund investments through
their own funds. Own funds are funds an NRI receives in India by way of inward
remittance from overseas, out of income earned overseas or personal savings
outside India, or funds held in non-resident external (NRE) or non-resident
ordinary (NRO), or foreign currency (non-resident) (FCNR) bank account for
purchasing real estate in India.
NRIs can also avail loans. NRIs
get complete support from the financial institutions and banks for the finance
required for the purpose of investment in properties in India. NRIs are
eligible for availing a home loan facility to purchase a property in India; in
fact they are considered a safe profile due to their good repayment capacity.