Changing investment strategies, financial commitments overseas, tax concerns and property maintenance challenges are reshaping the real estate investment approach of Non-Resident Indians (NRIs), including expatriate Malayalis.
By : Viji K Varghese (Real Estate Expert)
For decades, investing overseas earnings in homes and land
in their homeland has been a major financial goal for Non-Resident
Indians. NRIs have invested heavily in houses, apartments, plots and commercial
properties across Kerala and cities such as Mumbai, Pune, Delhi and Bengaluru.
The primary motivations have included plans to return to India, family
security, children's future, rental income and long-term capital appreciation.
However, a noticeable shift is now emerging in this
approach. A 2026 report indicates that some NRIs are increasingly interested in selling their existing properties and restructuring their investments rather than buying additional real estate in India.
According to the Annual NRI Wealth Report 2026,
published by Remittor, approximately 46.4% of the NRI property owners surveyed
expressed an interest in selling their properties immediately. Another 26.2%
were considering selling within six months. Residential properties accounted
for 88.8% of the assets being considered for sale. A significant proportion of
respondents also indicated that they intended to transfer the proceeds overseas
rather than reinvest them in Indian real estate.
1. More NRIs Are Choosing to Settle Permanently Overseas
One of the primary reasons NRIs traditionally purchased
property in India was the intention to return home in the future. Many Indians
working in Gulf countries invested in homes with the expectation of returning
to Kerala after retirement and living in properties they had purchased.
However, the circumstances of people living long-term in
countries such as the United States, Canada, Australia and the United Kingdom
have changed. As careers, families, children's education and social lives
become established overseas, some NRIs are becoming less likely to return to
India permanently.
Consequently, a house in their hometown may increasingly
become an underutilised asset rather than a future residence. Some owners
believe it is more practical to sell a property and redirect the proceeds into
other investments than to continue paying taxes, maintenance expenses and
security costs for a house they use only for a few days each year.
2. Rising Living Costs and Financial Commitments Overseas
The rising cost of living abroad is another important factor
influencing NRI investment decisions.
Home loan repayments, children's higher education,
healthcare, retirement savings and everyday living expenses can require
substantial financial resources. In some countries, elevated mortgage interest
rates, housing costs and other expenses continue to place pressure on household
budgets.
In such circumstances, property owners may decide to unlock
the capital tied up in an Indian apartment or plot to reduce overseas debt,
finance their children's education or strengthen their retirement savings.
Therefore, selling a property does not necessarily indicate
financial distress. In some cases, it may be a carefully planned decision to
improve long-term financial security.
3. Low Rental Yields and Rising Maintenance Costs
Not every house or apartment purchased by an NRI generates
attractive rental income. Properties held for many years can require ongoing
expenditure on repairs, society maintenance charges, property taxes, insurance
and security.
Finding reliable tenants and ensuring timely rent payments
can also be challenging. If a tenant vacates a property, it may remain
unoccupied for months, resulting in a loss of rental income.
Over the past decade, land prices in several areas,
including parts of Kerala's rural and semi-urban regions, have not always
delivered substantial appreciation. As a result, some investors who committed
large sums to land purchases have not achieved the returns they expected.
Rental yields from residential properties can also be
relatively modest. For example, the rental income from an expensive independent
house may represent only 2–3% of the investment value annually. Actual returns
may be lower after accounting for maintenance expenses, vacancies, taxes and
other costs.
For NRIs, the challenge is not merely generating rental
income but ensuring that the returns justify the capital invested and the
ongoing effort required to manage the property.
4. Difficulties in Managing Property from Abroad
Managing property in India while living overseas is not
always straightforward. Rental disputes, building repairs, land boundary
issues, document updates, tax payments and legal procedures often require
reliable local assistance.
Some owners depend on relatives, friends or representatives
appointed through a Power of Attorney. However, finding dependable assistance
and ensuring that the property is properly managed can be difficult.
Concerns about land encroachment, fraudulent documents,
unauthorised transfer attempts and prolonged legal disputes may also influence
investment decisions. Properties left unused for extended periods can be
particularly challenging to monitor and protect.
As a result, some NRIs prefer selling their assets and
moving the proceeds into financial investments that are easier to monitor and
manage remotely.
5. The Cost of Maintaining Unoccupied Homes
Maintaining unused houses is another major challenge for
expatriate families, particularly in Kerala.
For families who visit India only for a few weeks each year,
maintaining a large house throughout the year can be expensive. Cleaning,
repairing leaks, repainting, maintaining electrical and plumbing systems, and
ensuring security require regular attention.
When nobody lives in a house, even minor defects can
gradually develop into expensive repair problems. Finding trustworthy property
caretakers and supervising maintenance work from overseas can also be
difficult.
Some families may prefer replacing a large independent house
with a smaller apartment or a residence offering professional maintenance
services. Others may choose to sell the property altogether to eliminate
recurring expenses and the stress associated with managing it from a distance.
6. A Growing Interest in Diversifying Investments
A house or plot may form an important part of an
individual's long-term wealth. However, concentrating a substantial proportion
of one's assets in a single property or location can create financial risks.
Some NRIs want to diversify the proceeds from property sales
across equities, mutual funds, bonds, pension plans and investments in other
countries. Each investment category has its own risk profile and return
potential, which should be carefully assessed.
Selling property also provides access to a substantial
amount of capital that can be allocated according to future financial
requirements.
This is another factor encouraging some owners to reconsider
their existing real estate holdings.
7. Attractive Investment Opportunities in Overseas
Markets
Investment opportunities in overseas real estate markets
have also become an important consideration.
In the past, foreign ownership of land and property was
restricted in several Gulf countries. However, markets such as the UAE now
offer freehold property ownership in designated areas, along with long-term
residency options, including the Golden Visa for eligible investors.
Dubai, in particular, has attracted international property
investors because of its established rental market and investment
infrastructure. Some properties can offer rental yields of around 6–9%,
although actual returns vary considerably depending on the location, property
type, purchase price, service charges and market conditions.
When overseas properties offer potentially higher rental
returns and professional management services, some NRIs may find them more
attractive than maintaining residential properties in India that generate
relatively low rental income.
8. Currency Exchange Rates and Overseas Financial Goals
Currency exchange rates are another consideration for
Indians earning overseas.
When an Indian property is sold, the proceeds are generally
received in Indian rupees. The amount ultimately available in the owner's
overseas currency depends on the applicable exchange rate and transfer costs.
An NRI living in Canada or the United States, for example,
may need funds to reduce a home loan, meet retirement expenses or finance other
financial commitments in their country of residence. In such cases, proceeds
from selling Indian property may help meet these objectives.
9. An Opportunity to Realise Gains from Older Investments
NRIs who purchased homes in Indian cities between 2010 and
2019 may now be reassessing the value of those investments. In certain
locations, infrastructure development, urbanisation and rising demand have
contributed to property price appreciation.
According to the report, more than 60% of the properties
being considered for sale were purchased between 2010 and 2019. This may
indicate that some owners are seeking to realise gains from investments held
for several years.
10. Preference for Selling Rather Than Purchasing New
Properties
Even if an investor decides to sell an apartment purchased
several years ago, the same individual may choose to invest in a commercial
property with better income potential in another Indian city or in a different
financial asset. Therefore, selling one property should not be interpreted as a
complete withdrawal from all investments in India.
However, if the trend of transferring the proceeds from
property sales outside India and reinvesting them overseas becomes stronger, it
could change the nature of NRI investment in certain segments of the Indian
real estate market.
11. From Emotional Investment to Financial Planning
Unlike earlier generations, who often viewed land as an
emotional asset, today’s NRIs are adopting a more practical approach, focusing
on returns, convenience and the future needs of the next generation. This is
one reason why some are selling large ancestral homes and investment land and
shifting their money into liquid assets or overseas investments.
For many NRIs, owning land and a house in their hometown was
once considered a safe, long-term investment. However, their approach to
investment is changing.
Although retaining land and property may offer the
possibility of future appreciation, the money invested in these assets cannot
be easily accessed for other needs. At the same time, some NRIs prefer to
diversify their investments across stocks, bonds, pension funds, various
financial instruments and real estate in foreign countries.
12. Economic Uncertainty and Employment Conditions Abroad
The income of NRIs is not always stable. Job losses, a
decline in business, visa-related changes and rising living costs in foreign
countries can affect the financial decisions of some families.
In particular, if income declines abroad while the costs of
maintaining a house in Kerala and other family responsibilities continue,
selling the property may become a way to reduce financial pressure.
However, not all property sales can be attributed to
financial difficulties. Some owners sell to secure profits, while for others,
the primary reason is that they no longer have any future use for the property.
13. Why Some NRIs Prefer Selling Rather Than Buying More
Property
The changing investment approach is not limited to a
reduction in interest in purchasing additional properties. It also reflects a
reassessment of the usefulness of existing assets.
An investor may decide to sell an apartment purchased
several years ago but continue investing in India by acquiring a commercial
property in another city or purchasing other financial assets.
Therefore, selling a house should not automatically be
interpreted as a complete withdrawal from the Indian investment market.
However, if more property owners transfer their sale
proceeds overseas and reinvest them there, the nature of NRI investment in
certain segments of India's real estate market could change.
14. What Could This Mean for India's Real Estate Market?
An increase in NRI property sales could add to the supply of
resale homes and apartments in selected markets. In areas with a high
concentration of NRI-owned properties, several properties entering the market
simultaneously could provide buyers with more choices.
However, an increase in sales does not automatically mean
that property prices will fall. Local demand, employment opportunities,
transport connectivity, infrastructure development, housing supply and access
to home loans will continue to influence prices.
Where some NRI owners need to sell quickly, buyers may gain
greater negotiating power. At the same time, properties in prime locations with
strong rental demand may continue to attract buyers.
This trend could also create new opportunities for
developers and real estate service providers. In addition to marketing new
projects, they can offer overseas owners professional services such as property
valuation, legal due diligence, sales assistance, tax coordination and support
with the repatriation of funds.
Conclusion: From Emotional Ownership to Financial
Planning
There is no single reason why NRIs are selling properties in
India. Rising living costs overseas, changing settlement plans, limited rental
yields, maintenance challenges, tax considerations, investment diversification
and the desire to realise gains from older investments can all influence their
decisions.
The 2026 Remittor report suggests that some NRI investors
are beginning to view Indian real estate not only as an emotional connection to
their homeland but also as part of a broader global financial strategy.
However, this shift should not be assumed to apply equally to all expatriates.
For India's real estate sector, attracting and retaining NRI
investors will require more than promises of property price appreciation.
Transparent transactions, reliable property management, reasonable rental
returns, clear legal documentation and quality customer service will become
increasingly important.
The key question facing NRIs is no longer simply, “Should
I buy a house back home?” It is also, “Does the property I already own in India
still align with my financial goals?”
The answers to these questions could increasingly shape the
future direction of NRI investment in India's real estate market.
By Viji K Varghes (Real Estate Expert)
About the Author:
(A seasoned Real Estate Professional with over two decades of experience, the author drives sales and marketing strategies for plot and weekend home developments across Delhi, Noida, Mumbai, and Kerala. He is also a renowned Motivational Speaker, Sales and Marketing Trainer)
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