NRIs Drive India’s Real Estate Boom with $16.3 Billion in Investments by 2025

India's real estate sector has been witnessing an impressive surge in investments from Non-Resident Indians (NRIs), who now view the market as a dependable avenue for portfolio diversification. This trend has gained momentum amidst global economic uncertainties, as India continues to offer relative stability and steady returns.

$16.3 Billion in Sight: NRI Investment on the Rise

NRI investments in Indian real estate reached $14.9 billion in 2024, and projections for 2025 suggest a climb to $16.3 billion, marking a steady annual growth rate of 9.2%. Mumbai emerged as the most favoured destination, attracting 31% of this capital, followed by Bangalore at 23% and Delhi-NCR at 19%.

Where the Money Flows

• Traditional property purchases dominated, accounting for $9.7 billion, or 65% of total NRI investments

• Commercial real estate stood out with rental yields ranging from 7.9% to 10.2%, outperforming residential returns of 3.8% to 5.2%

• REITs are gaining ground, attracting investors seeking passive income with professional asset management

Fractional Ownership Emerges as a Game Changer

The segment of fractional ownership platforms witnessed remarkable growth of 71% in 2024. NRIs accounted for over half of this capital, contributing $2.5 billion and securing estimated returns between 8.9% and 13.2%. The rise of such platforms reflects growing investor appetite for shared ownership of high-value assets with reduced entry barriers.

Boost from Regulatory Reforms

The implementation of RERA and the March 2024 SEBI regulations for fractional ownership have significantly improved transparency, strengthening investor trust in the sector. These reforms are helping NRIs invest with greater clarity and legal backing.

Weaker Rupee Amplifies Buying Power

Another catalyst behind this investment boom is the depreciation of the Indian rupee. For NRIs earning in stronger currencies like the US dollar, euro, or pound sterling, this translates into enhanced purchasing power in India. High-end Indian properties have thus become relatively more affordable, offering attractive long-term appreciation prospects.

Counterpoint on Housing Affordability

Commenting on rising housing prices, a market expert noted that NRIs are unfairly being blamed for driving up prices. He pointed out that the underlying problem lies in domestic economic challenges such as low wages, weak job creation, and lack of high-value businesses. He argued that NRIs can afford property because they earn in stronger currencies, not because they distort the market. The issue, he emphasized, stems from India’s reluctance to embrace wealth creation at scale.

India Remains a Strategic Investment Bet for NRIs

For overseas Indians, investing in Indian real estate offers a compelling risk-return profile compared to stocks or international markets. With improving regulation, currency advantages, and a diversified investment ecosystem, the Indian property sector continues to attract NRI capital with strong conviction.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Readers are advised to consult with financial advisors before making any investment decisions.