The surge in demand follows changes in regulations permitting repatriation of rental income as well as proceeds from sale of property.

Many NRIs, following amendments in the Budget for 2003-04 allowing full repatriation of funds, have converted their non-resident non-repatriable rupee savings accounts into non-resident external accounts, which are fully repatriable.

Properties with the potential of being leased out to MNCs, large corporates, banks or embassies are the most in demand.

"An NRI with surplus funds in bank deposits will get better returns by giving his flat to a bank and earning monthly rentals on it," said chartered accountant K K Ramani, who deals with real estate and NRI clients.

NRIs are seeking better returns through investments in property leased out to large corporates.

"In Mumbai and Delhi, lease rentals are as high as 10-13 per cent of the value of a residential property and 13-14 per cent for furnished apartments and offices," said Insignia Brooke Director Ashok Kumar. The rate of return on rentals is relatively higher in India than in other parts of the world.

The key attraction of this income from leave and licence is that it is assured for a fixed period of three to five years.

Leasing out apartments to corporates helped NRIs to recover their monthly maintenance costs, Cushman & Wakefield said in its recent real estate report.

It points out that much of the buying interest is focused in the suburbs for prime apartments and pent-houses. In the Capital, NRIs are attracted to farmhouses.

In the early 1990s, the incentive to invest in the market was on account of the real estate boom.

"Today, with the economy progressing, NRIs want to park surplus funds in their country of origin. They are not investing in one place as they look across markets within the country and then take an informed decision," said Cushman & Wakefield India Executive Director Chanakya Chakravarti.

Consultants and brokers are advising that since prices of properties have fallen sharply across the board, this is the right time to buy.

Says a broker operating on behalf of NRIs: "Developers are offering a wider choice of flats. Instead of offering housing options in the range of Rs 50-60 lakh (5-6 million), we have ample options for the middle class NRI in the range of Rs 800,000 and Rs 25 lakh (Rs 2.5 million)."