A 52% of NRIs now consider India's commercial real estate (CRE) a key part of their investment strategy, according to a survey by SBNRI released in July. This represents a significant shift from the traditional preference for residential property, with the emergence of fractional ownership models opening up commercial real estate to a wider pool of overseas investors. As reported by The Economic Times, this evolution reflects changing investment patterns among Non-Resident Indians who previously viewed property ownership as both an investment and a tangible connection to their homeland.
According to Alekh Yadav, Head of Investment Products at Sanctum Wealth, the emotional connection to property is fundamental for many NRIs. A property is visible, physical and relatively easy to understand, while a financial portfolio can appear more abstract to investors living thousands of kilometres away from India. Rohit Sarin, Co-Founder of Client Associates, similarly points to the same behavioral dynamic, noting that property is tangible, familiar and emotionally connected to the idea of home. This explains why NRIs may gravitate towards buying another apartment in India rather than allocating a larger portion of wealth to financial assets, despite being comfortable earning in foreign currencies.
India's real estate market is witnessing unprecedented growth beyond traditional metropolitan centers, with tier-II cities and urban peripheries capturing the bulk of incremental land transactions. According to Cushman & Wakefield, India's land market saw 18,158 acres transacted across more than 880 deals in 33 cities between 2021 and Q1 2026, with annual transacted acreage consistently rising from 813 acres in 2021 to 6,181 acres in 2025, growing at a CAGR of approximately 66%. Tier-II acreage has surged from a mere 16 acres in 2021 to 2,120 acres in 2025, lifting its share of annual transactions from around 2% to 34%, with momentum accelerating into 2026 as tier-II markets accounted for 67% of land transacted in Q1 2026 and overtook tier-I cities for the first time. As reported by PropEquity, nearly 4.7 lakh residential plots across the top 10 Tier I and Tier II cities have been launched by developers between 2022 and 2025 (May), with realtors in the top seven Tier II cities supplying 2.43 lakh residential plots, accounting for 52% of total launches.
Residential plots are emerging as a particularly attractive investment option for NRIs, as buyers increasingly look at emerging corridors for potential capital appreciation and returns. According to PropEquity, buyers are moving away from vertical, depreciating apartments in favor of absolute land ownership, recognizing that land inherently captures the maximum upside of rapid urbanization. City peripheries are rapidly transforming from sleepy outskirts into primary engines of real estate growth, with corridors like Gunjur and Varthur effectively bridging the distance to employment hubs like Whitefield, Sarjapur Road, and the Outer Ring Road (ORR). There has been a growing interest from HNIs and NRIs in these markets, particularly where upcoming infrastructure and employment hubs can support long-term appreciation. As reported by The Economic Times, rising land transactions, improving infrastructure connectivity and relatively attractive entry prices are encouraging both investors and end-users to look beyond established urban centres.
Government-led infrastructure spending is increasingly reshaping India's real estate growth story beyond established metropolitan markets. The Central Government's public capital expenditure on core infrastructure is estimated at ₹51.72 lakh crore over FY23-FY27, underlining the scale of this transformation. The Centre and states are investing heavily in expressways, highways, metro networks, rapid rail and airports - not merely to ease mobility, but to create new economic centres and strengthen regional connectivity. As connectivity improves and city boundaries expand, city peripheries and Tier-II cities are emerging as new engines of real estate demand across asset classes. The convergence of infrastructure, employment, affordability and improving urban amenities can create self-sustaining growth ecosystems, making these markets an increasingly important part of India's broader real estate and economic expansion story.
While property appreciation can appear compelling on the surface, the actual returns require careful analysis. According to The Economic Times, a property that becomes 10 times its original value over 20 years translates to a compounded annual growth rate (CAGR) of roughly 12.2% before accounting for maintenance, taxes and other expenses. Once these costs are factored in, the investor's actual return can be meaningfully lower. For wealthy NRIs holding multiple properties across cities, the headline appreciation needs to be weighed against opportunity cost, transaction costs, taxes, maintenance expenses and liquidity considerations.
