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How the Indian housing sector continues to grow with domestic and international interest due to the country’s unique currency-linked scenario.
Why NRIs continue to invest in Indian property? (Photo Credits: X)
Non-Resident Indians are maximising a currency trick that has given them a unique advantage in securing real estate in India. According to market analyst Anubhav Kapoor, Indian loan home rates are now almost equal to the government’s cost of borrowing for the property.
Increasingly, the NRIs are enjoying the narrowest mortgage-to-sovereign advantage in the world, which refers to the type of mortgage where the property is pledged as security for a loan term, with the government playing the lending body.
Loan Interest Rates Similar To Govt Yeild Bond
Top Indian banks like HDFC Bank and State Bank of India are offering home loans at just 7.4 per cent, which is merely 16 basis points above the government of India’s 30-year-old bond yield worth 7.24 per cent. “Indian salaried families borrow almost at sovereign rates—a rare global privilege,” claimed Kapoor in a LinkedIn post, giving a breakdown of a global comparison.
In developed economies, however, the spread between home loan rates and long-term government bonds is wider. According to Kapoor, the spread stands at 1.6 percentage points or roughly above 35 per cent above the sovereign rate in the United States. A similar gap of 33-61 per cent is observed in Canada, the UK and Australia.
Minimal Spread
A minimal spread in India is allowing middle-class citizens to access and acquire real estate at rates nearly equivalent to what the Indian government pays. The scenario makes India an economic anomaly, where mortgage financing is highly affordable as per international standards and thus easier to invest in for NRIs.
“NRIs earn in USD, CAD, GBP, or AUD, but invest in Indian real estate priced in INR,” Kapoor noted. It gives birth to an advantageous strategy for NRIs. As the Indian currency has historically depreciated by 3 to 4 per cent annually against foreign currencies, it boosts profitability for investors based overseas.
At a time when many global markets have experienced cooling or correction phases, India’s housing sector continues to be resilient and attracts domestic and international interest. The key here is the unique convergence of near-sovereign borrowing costs for Indians and currency-based return advantage for NRIs.
A team of writers and reporters decodes vast terms of personal finance and making money matters simpler for you. From latest initial public offerings (IPOs) in the market to best investment options, we cover al…Read More
A team of writers and reporters decodes vast terms of personal finance and making money matters simpler for you. From latest initial public offerings (IPOs) in the market to best investment options, we cover al… Read More
November 15, 2025, 15:17 IST
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