Recent real estate trends in the past years have shown a steady growth in interest of non-resident Indians (NRIs) in the Indian market. While this can be attributed to several factors like rising rental yield, consistent growth in property value and currency exchange advantages, thanks to the reforms by RERA and better access to financing it is now more practical and convenient than ever for NRIs to invest in real estate. However, the pertinent question that arises is: where to invest? The choice of the location depends on the end goal of the investment and different cities offer varied possibilities. In this article, we will explore the most popular cities for NRIs to invest in real estate and what each of them has to offer.
See also: NRI’s guide to selling property in India
Why are NRIs turning to Indian property in 2025?
- Appreciation potential: Property values in key Indian markets have shown consistent long-term growth.
- Attractive rental income: Urban areas with high tenant demand provide reliable monthly income.
- Exchange rate advantage: A stronger dollar or euro gives NRIs more buying power in rupee terms.
- Easier property buying process: Legal and financial reforms have streamlined property acquisition for NRIs.
- Diversification benefits: Real estate helps balance investment portfolios across global markets.
- Legacy asset building: Many NRIs purchase property for long-term family use or wealth preservation.
Top 10 cities for NRI real estate investment
#1 Bengaluru: The tech capital
Bengaluru’s status as India’s tech capital ensures steady housing demand from IT professionals and expats. It also offers modern infrastructure, a cosmopolitan lifestyle, and established residential zones.
Hot spots: Whitefield, HSR Layout, Indiranagar, Koramangala
Price band: Rs 6,000 –Â 15,000 per sqft.
Rental returns: 4.5 – 5% approx.
#2 Mumbai Metropolitan Region (MMR): High demand, high returns
Mumbai remains a premium market due to its economic clout and limited land availability. While central areas are costly, emerging suburbs offer more accessible entry points.
Hot spots: Mulund, Goregaon, Kandivali; also Navi Mumbai and Thane
Price band: Rs 15,000 –Â 40,000+ per sqft.
Rental returns: 3 – 4% approx.
#3 Pune: The upcoming education and IT hub
With a strong presence of IT parks, manufacturing units, and academic institutions, Pune combines affordability with growth potential. Its rental yields are among the highest for major cities.
Hot spots: Hinjewadi, Baner, Kharadi, Magarpatta
Price band: Rs 5,000 –Â 9,000 per sqft
Rental returns: 5 – 6% approx.
#4 Kolkata: Tier 1 real estate on a budget
One of the most budget-friendly metros, Kolkata is witnessing infrastructure upgrades and steady demand. The city’s value proposition lies in low entry costs and attractive rental returns.
Hot spots: Rajarhat, Salt Lake, EM Bypass
Price band: Rs 3,000 –Â 6,000 per sq.ft.
Rental returns: Up to 6.3%
#5 Hyderabad: Rapid growth, affordable luxury
Hyderabad stands out for its planned urban layout, strong IT presence, and affordability. Real estate here is supported by large-scale infrastructure and tech-driven employment.
Hot spots: Gachibowli, Madhapur, Tellapur, Nallagandla
Price band: Rs 4,000 –Â 7,000 per sq.ft.
Rental returns: Up to 4%
#6 Delhi NCR: Diverse options, mixed potential
The National Capital Region has robust infrastructure, corporate hubs, and government projects like the Jewar Airport that promise future value.
Hot spots: Sector 150 (Noida), Dwarka Expressway, Golf Course Road (Gurugram)
Price band: Rs 6,000 –Â 15,000 per sq.ft.
Rental returns: 5 – 6% approx.
#7 Chennai: Stable, value-driven market
This southern hub has diversified job sectors – from IT to healthcare to automotive. The city has reliable infrastructure and is known for its stable real estate market.
Hot spots: OMR, ECR, Velachery, Porur, Anna Nagar
Price band: Rs 5,000 –Â 10,000 per sq.ft.
Rental returns: 3 – 4% approx.
#8 Ahmedabad: The next big thing
A growing urban center with business-friendly governance, Ahmedabad offers NRIs low property prices and decent yields. Infrastructure investments and smart city initiatives boost its appeal.
Hot spots: SG Highway, Satellite, GIFT City
Price band: Rs 3,500 –Â 6,000 per sq.ft.
Rental returns: 4 – 5% approx.
#9 Kochi: Gateway to Kerala’s real estate boom
Alongside the availability of affordable waterfront and luxury properties, the rapid infrastructure development like Kochi metro and Smart City project make Kochi an attractive destination for NRI investment.
Hot spots: Kakkanad, Marine Drive, Edapally
Price band: Rs 5,000 –Â 9,000 per sqft
Rental returns: 3 – 4% approx.
Housing.com POV
While choosing a city for investing in real estate, it is important to take into account the investment goal. If the stability of long-term rentals and liquidity is what you seek, it is recommended to go for established cities like Mumbai, Delhi NCR or Chennai. Similarly, tech-centric cities and emerging hubs offer better potential in terms of capital gains. Regardless of location, opting for RERA-approved projects from credible developers and evaluating tax considerations beforehand is non-negotiable.
FAQs
What types of property can NRIs buy in India?
NRIs are permitted to buy residential and commercial real estate, but not agricultural land, plantations, or farmhouses.
Can NRIs co-own property with resident Indians?
Co-ownership is allowed only with other NRIs or immediate family via inheritance. Direct co-ownership with resident Indians is generally restricted.
Are home loans available for NRIs?
Yes, many Indian banks provide NRI-specific loans for buying flats, villas, or plots. Loan eligibility is based on income, age, and country of residence.
Which bank accounts should NRIs use for buying property?
Property investments and returns can be routed through NRE or NRO accounts. NRE accounts allow repatriation, while NRO accounts handle income like rent.
Is rental income earned by NRIs taxed in India?
Yes. Rent is taxable under Indian income tax laws, and tenants are required to deduct TDS at the source (currently 31.2%). However, NRIs can claim deductions for maintenance and loan interest.
What are the capital gains rules for NRIs selling property?
Short-term gains (holding under 2 years) are taxed as regular income. Long-term gains (over 2 years) are taxed at a fixed rate (as per the Finance Act 2024, it's 12.5% without indexation).
Can NRIs repatriate proceeds from property sales?
Yes, up to USD 1 million per financial year is allowed through NRE/NRO accounts after taxes are paid, subject to documentation and RBI guidelines.
| Got any questions or point of view on our article? We would love to hear from you. Write to our Editor-in-Chief Jhumur Ghosh at jhumur.ghosh1@housing.com |
Comments 0