Instead, experts expect both asset classes to benefit simultaneously as confidence in India’s macroeconomic stability strengthens.
The RBI recently introduced steps aimed at boosting foreign currency inflows, including a special swap facility for banks and temporary relaxation on interest rate ceilings for fresh FCNR(B) deposits with maturities between three and five years.
The move has enabled banks to offer higher returns on dollar-denominated deposits, drawing attention from overseas Indians seeking stable and liquid investment avenues.
However, real estate developers and financial experts say Indian residential property continues to occupy a distinct space in NRI portfolios as a long-term wealth creation asset.
“The narrative that FCNR deposits will divert capital away from Indian real estate is misplaced,” said Pratik Tibrewala, SVP & Head Corporate Finance at M3M India, a luxury real estate developer. “FCNR is fundamentally a treasury and liquidity product, whereas residential real estate is a long-term wealth creation and asset allocation decision.”
Tibrewala noted that NRI participation in Indian real estate has strengthened significantly in recent years, especially in the premium and luxury housing segments. “At leading developers, NRI contribution to sales has increased from single digits pre-pandemic to nearly 20–25% today,” he said.
Experts believe the RBI’s measures could, in fact, improve the overall investment climate for overseas Indians by strengthening India’s external position, supporting currency stability, and reinforcing confidence in the economy.
Anil Godara, Founder and Managing Director of J Estates, a real estate developer and agency headquartered in Gurugram, said the measures are likely to expand the overall pool of foreign investments flowing into India rather than create competition between banking deposits and real estate.
“While attractive FCNR(B) deposit rates may encourage NRIs to allocate a portion of their funds towards banking instruments, Indian real estate continues to hold a distinct appeal as a long-term wealth creation and preservation asset,” Godara said.
According to him, premium residential real estate is being viewed by NRIs not merely as housing, but as a strategic investment offering capital appreciation, asset security, and portfolio diversification.
The broader housing market fundamentals also remain supportive.
Recent data from the National Housing Bank showed that India’s 50-city Housing Price Index rose 4.5% year-on-year in the fourth quarter of FY26, with major cities such as Bengaluru, Mumbai, Hyderabad, Chennai, Pune and Kolkata recording steady price appreciation.
Jason Samuel, Managing Director of House of Swamiraj, a privately held real estate developer in India, said the resilience in housing prices continues to reinforce real estate’s attractiveness among overseas Indians.
“Some NRI funds may temporarily move into deposits, but that does not weaken the structural appeal of Indian housing,” Samuel said. “Deposits cater to short-term financial planning, while real estate continues to attract investors looking at long-term value creation in India.”
Samuel added that the two investment avenues serve different purposes within an NRI portfolio. “In practical terms, both can coexist because they address different investor needs, one offers stability and liquidity, while the other offers long-term ownership and upside.”
Experts also pointed to rising remittance inflows as evidence of growing financial capacity among NRIs to invest in India.
According to the Economic Survey 2025-26, India received a record $135.4 billion in remittances during FY25.
Experts believe that against the backdrop of global macroeconomic uncertainty and volatile financial markets, Indian real estate is emerging as a relatively stable and appreciating asset class for overseas investors.
