Indian Government Bans Global Property Purchases

In a strange turn of events, the Indian government has banned the purchase of property outside of the country itself. This news could very well affect housing markets around the globe, as Indian purchasers make up a substantial percentage of international buyers.

Designed to keep Indian moneys inside the country, the new regulation prevents Indian residents from investing in or purchasing "immovable property" outside India. Earlier last month the Reserve Bank of India (RBI) reduced remittances from $200,000 to $75,000 a year, and disallowed those funds to be used for property or investment purchases.

This news comes as a surprise, and possible blow, to the US and other housing markets as Indian buyers have been active players. In the US, Indian buyers have consistently been among the top five foreign origin purchasers. In the first two quarters of 2013, Indian buyers were the number one purchasers of Dubai property, responsible for over $945 million in sales.

The goal behind the new regulation aims to watch money change hands locally in, perhaps, extremely lucrative real estate opportunities. If foreign investments are no longer a possibility, those potential investments will find a new home on Indian soil.

How do you feel about this new Indian government regulation? Do think it is fair to have the government and banks tell you how you can invest your money? We'd love to hear your thoughts on this interesting new development, in our comment section below. Let us know!

Photo courtesy of Dimitry B’s Flickr