An NRI couple who purchased a 3BHK flat in Hyderabad for ₹64 lakh in 2010 recently sold it for ₹1.8 crore, a figure that seems impressive until you factor in currency depreciation and inflation. Despite the apparent doubling in value, the actual return in USD terms was modest, leading to disappointment and a re-evaluation of India’s real estate as a reliable NRI investment.
The property, located in a well-known suburb, was seen as a safe bet at the time. But slow rental yields, rising maintenance costs, and rupee depreciation significantly reduced real gains when converted back to dollars.
Many NRIs invest in Indian real estate for emotional and financial reasons—be it a future retirement plan, family security, or as a perceived hedge against inflation. However, returns on real estate in India often don’t match the expectations of diaspora investors, especially when evaluated in foreign currency terms.
Here’s what NRIs need to consider:
- Rupee depreciation can erode gains when converting back to USD, CAD, or GBP.
- Rental yields in India remain low (2–3%) compared to global markets.
- Liquidity and resale can be challenging without local oversight or trusted agents.
Indian real estate may offer stability and emotional value, but it’s no longer a guaranteed high-return option for NRIs. Before investing, evaluate:
- Currency risk
- Long-term capital gains tax
- Actual vs perceived growth
📊 Smart tip: Compare Indian property ROI with mutual funds or real estate options in your current country for a better apples-to-apples benchmark.