Buy Property In India

In the last decade, India has become a hot spot for investments, and this includes investments in the property market too.

Why is the Indian Property Market Hot?

Riding on the wave of strong economic growth due to the surge in the Information Technology and services sector, as well as pro liberalization policies adopted by successive governments, salaries and disposable incomes for the upper and middle classes have shot up. This coupled with the easy availability of housing loans from various banking institutions have led to an unprecedented demand for houses and property.

Indian Property Market Estimates

Project after project in terms of home properties and commercial spaces have burgeoned. According to some estimates, 23 million square feet of new space will come up in the market by 2008 and by 2009 this would increase to 50 million. The country’s commercial and real estate market is valued at around $55 billion dollars now and is expected to increase by 25 % annually.

With the change in regulations, notably the dumping of the Foreign Exchange Regulations Act and the adoption of the Foreign Exchange Management Act, Non Resident Indians, as well as Persons of Indian Origin can now buy property in India. Others who do not fall into this category can do so too, with the prior approval of the Reserve Bank of India. This internal as well as external demand for land and property has transformed India into one of the biggest property markets in the world.

Is this the right time to buy?

This seemingly is the right time to buy property in this country, even though the prices are expected to undergo correction in the region of around 25 percent in the next two years. The market environment is very investor friendly even though the rate of loans has increased by around two percent. Salaries are set to rise even further and the average span of working life has also increased. With the advent of the reverse mortgage instrument in the Indian markets, as well as the fact that property values can only go up or stabilize, clearly the time to buy property is now.

Who can buy Property?

Any Indian citizen, or a Non Resident Indian (NRI) or a Person of Indian Origin (PIO) can buy property in India. An Indian citizen residing abroad is an NRI(Non Resident Indian). Any person who is a citizen of any other country than India, but has previously held an Indian passport, or if his father or grandfather has been an Indian citizen, then that person is a PIO (Person of Indian Origin), provided that he doesn't belong to any of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal and Bhutan.

NRI’s and PIO’s can buy an unlimited number of properties in India and they are not subject to any restrictions, when it comes to residential and commercial properties. This does not apply to agriculture / farm land / and or plantation property. The purchase of these properties requires the permission of the Reserve Bank of India, unless they are acquired as inheritance.