NRI home loans on the upswing 2

What experts say?

Experts agree that despite turbulence in mature markets, the 'emotional appeal' of buying a property in India may be stronger now. However, this in turn has created a price increase in the last six months.

Popular property portals claim that the number of queries from NRIs has surged nearly 15-20 per cent over the last two-three months. However, just how many of these 'queries' translate into actual sales remains to be seen, say people behind the business.

The focus on NRIs for these portals is stronger now as many are looking to come back to India apart from those who wish to invest in properties.

Another factor that seems to favour NRIs is the foreign direct investment policy that permits up to 100% FDI from foreign/NRI investors under the automatic route has boosted NRI confidence.

Banks have attractive NRI housing schemes to accommodate the housing needs of NRIs. From the stables of housing finance companies, NRI housing finance plans with suitable repayment options are available.

Easy interest rates on housing finance and the improved lifestyle that developers have created have enabled NRIs to acquire property not only for investment, but also for personal use.

Access to NRI loans: At the door step

The response to the real estate market has been so encouraging from the overseas community that it has prompted housing finance companies to set up branches in countries where there is a high NRI concentration, as in the case of ICICI Bank

The bank has representative offices in Dubai, New York, Bahrain, Singapore and the United Kingdom to tap potential property investors there.

ICICI Bank, Sundaram Home Finance Limited, LIC Housing Finance , HDFC , CanFin Homes, Citibank and a host of other scheduled banks are vying for lending opportunities to NRIs.

However, the final decision on whether the time is right to buy a house, whether to use one's own funds or to take a loan, whether to go for an independent house or an apartment, and which home loan provider to use must be made by the NRI himself/herself after careful analysis.

What this means for the realty market

Builders are looking to make up for the huge losses in the past year or so. With growing NRI interest in Indian properties, reports suggest that the realty prices have rebounded to 2007-2008 levels, which however cannot be good news for people scouting for homes with toned down prices.

This is again an example of how a reaction in one corner of the globe can affect another. Sometime back the same scenario happened with rentals, which shot up with a lot of NRIs returning home to take up jobs in India.