NEW DELHI: Realtors' body NAREDCO today sought review of the RBI's decision to double the annual overseas investment ceilings for individuals to $ 2,50,000, saying the move could have an adverse impact on domestic real estate industry.
NAREDCO said that it has made a representation to the Prime Minister, urging that RBI's decision should be reviewed "as this has potential to divert investment in real estate away from India, thereby, adversely impacting the sector at a time when market sentiment towards real estate is down."
NAREDCO pointed out that residential sales declined by about 30 per cent in 7 major Indian cities during 2014 and the decline was particularly steep in the national capital region.
The association said that improving market sentiment is very crucial today for revival of real estate and strengthening of domestic economy.
It demanded that the corrective measures to encourage investment in the domestic market be given priority instead of facilitating purchase of property by Indians in Dubai, US, UK, Singapore etc.
"It is pertinent to note that Indians were no.1 foreign investor in Dubai property during 2014 with investment of Rs 3,025 crore, invested $ 5.8 billion, 6 per cent of total purchases in the US market during 2013-14 and were leading investors in UK for housing," NAREDCO said.
Earlier this month, the Reserve Bank doubled the annual overseas investment ceiling for individuals to $ 250,000.
"On a review of the external sector outlook and as a further exercise in macro-prudential management, it has been decided to enhance the limit under the Liberalised Remittance Scheme (LRS) to $ 250,000 per person per year," the RBI had said in its bi-monthly monetary policy statement.
The LRS allows residents to acquire and hold shares, debt instruments or other assets outside India without prior approval of the RBI.