Why NRIs Are Flocking to South Indian Real Estate

South India — particularly Chennai, Hyderabad, Bengaluru, and now Coimbatore — continues to attract NRI buyers for several compelling reasons: strong diaspora connections, transparent RERA framework, and rupee depreciation that makes dollar/dirham-priced purchases increasingly attractive.

RBI data shows NRI remittances for real estate investment crossed ₹1.92 lakh crore in calendar year 2025, up 24% from 2024.

Who Can Buy What — FEMA Rules

Under the Foreign Exchange Management Act (FEMA) and RBI guidelines:

  • NRI (Non-Resident Indian) and OCI (Overseas Citizen of India): Can purchase residential and commercial properties freely. No RBI permission required.
  • Foreign Nationals (non-NRI, non-OCI): Cannot purchase residential property in India without RBI approval. Agricultural land, plantation property, and farmhouses are prohibited for NRIs too.
  • PIOs without OCI card: Treated as foreigners. Consult a FEMA specialist.

Financing Your Purchase

NRIs can avail home loans from Indian banks:

  • Eligible lenders: SBI, HDFC, ICICI, Axis Bank, and most scheduled commercial banks
  • Loan-to-value (LTV): Up to 80% of property value
  • EMI repatriation: EMIs must be paid from NRE/NRO account or foreign currency account; repatriation of principal and interest is freely allowed from NRE accounts
  • Documentation: Passport, visa, overseas employment proof, 6 months' salary slips, overseas bank statements, and Indian address proof

Power of Attorney (PoA)

Since most NRIs cannot physically attend every stage of the transaction, a notarised and apostilled PoA from the country of residence is essential. The PoA must be:

  • Executed in the country of residence
  • Attested by the Indian Consulate/Embassy
  • Registered at the Sub-Registrar's office in India once received

Tax on Sale

When selling after 2 years (long-term capital gains): tax at 12.5% (no indexation post-2024 amendment). TDS is 12.5% to be deducted by the buyer. NRIs can apply for a lower TDS certificate from the Income Tax Officer to reduce this burden.

Best Cities for NRIs in 2026

  • Chennai: Preferred by Tamil diaspora; ECR and OMR offer beach-front to IT-belt exposure
  • Hyderabad: Telugu diaspora favourite; Gachibowli, HITEC City, and Kokapet offer strong rental yields
  • Bengaluru: For NRIs in tech; Whitefield and Sarjapur Road remain evergreen

Tips for a Smooth Remote Purchase

  • Use video KYC — most banks now accept this
  • Insist on video walkthroughs of the site and sample flat
  • Engage a local RERA-registered agent for on-ground verification
  • Never transfer money to a builder's personal account; always to the RERA escrow account