Limit on investing in overseas property to dampen sentiment

RBI, seeking to support the battered rupee, yesterday disallowed the use of remittances by resident Indians to buy property overseas

The Reserve Bank of India's curbs on Indians investing in international real estate under the liberalised remittance scheme will dampen investor sentiment, property consultancy firm Jones Lang LaSalle said.

 

The RBI, seeking to support the battered rupee, yesterday announced measures to reduce foreign exchange outflows. The steps included disallowing the use of remittances by resident Indians to buy property overseas.

 

"The new restrictions have been introduced in an effort to stabilise the rupee. This move will have medium to long-term implications," JLL Chief Executive Officer (residential services) Om Ahuja said in a statement.

 

Individuals who were planning to buy international real estate at attractive valuations and planning for their kids' education and housing abroad will now see such plans challenged, he said.

 

"Currently, the variety of options available on the international property market offer very attractive rental yield and valuations. This, now becoming restricted, is going to make planning difficult. The new restrictions will put a dampener on the sentiment of Indian investors who were considering this route," Ahuja added.