When it comes to residential real estate investments by NRIs, Bengaluru has maintained its position as their most-preferred Indian city, particularly for those interested in the mid-range and budget housing segments as per reports. The pleasant weather conditions and cosmopolitan environment are major reasons along with steady appreciation in property values, higher rental yields, and a flourishing commercial sector.
Yet, Bengaluru is majorly a housing market driven by end-users in terms of sales, although it still attracts most NRIs looking for lucrative property investment opportunities. Reports indicate how 65% of transactions are for investment reasons, while 35% are for end-use. Other reports indicate a ratio of 60:40 in terms of investment and end-use. Most of these transactions are second/third additions to NRI real estate portfolios according to industry consultants and developers.
Principal Partner and Sales Director, Square Yards, Sharad Sharma, NRIs are steadily diversifying investments beyond apartments, indicating their interest in categories like plots and senior living communities.
The US, Singapore, and the UAE are the three largest geographies that are witnessing huge demand from NRIs in projects of leading real estate developers in Bengaluru like Brigade and Concorde. The former has confirmed around 10% of sales from NRI buyers which either take place when they come to India or abroad at the company’s events. Some also take place via outreach measures taken by international teams. NRIs usually prefer deploying investments in areas that witness higher rental demand, majorly in proximity to IT corridors and also in projects by leading real estate brands.
Some of the top areas for investments include East Bengaluru’s Sarjapur Road, North Bengaluru’s Thanisandra, and the southern Kanakapura Road. Average property prices in these locations are currently between INR 9-12,000 per sq. ft. Some experts also highlight Devanahalli and Hebbal as good options for NRIs owing to projects by Grade-A developers in these areas, their proximity to the international airport, and comparatively reasonable property rates. More than 55% of NRI buyers also choose property management services during purchase as per reports.
69% of transactions enabled by SquareYards.com among NRI buyers were in the affordable and mid-range housing category, that had units priced less than INR 1 crore. Other experts have confirmed how about 70% of demand has been in the range of INR 1.5-2 crore in Bengaluru. A large chunk of this demand for affordable homes comes from administrative and clerical NRI workers who put their savings into 2 or compact 3 BHK units to either earn steady rentals or move into once they come back to India. Mid-segment homes are more popular among technology professionals, who mostly opt for 3 BHK units. C-Suite executives, on the other hand, usually go for villas as per several industry watchers.
Yet, experts point at the need to improve infrastructure, while tackling traffic congestion which is a big deterrent for NRI buyers. At the same time, NRI demand is also healthy in other major markets like North India. For FY2022-23, Gurugram-headquartered DLF saw more than INR 2,000 crore in sales from NRI investors and buyers, accounting for 14% of its overall sales tally. The biggest contributions came from the US, UK, GCC, and Singapore, with DLF anticipating this figure to increase to 20% in the current year. A new project by the company named DLF Privana South, has already seen 25% of sales or approximately INR 1,800 crore coming from NRI markets, particularly from the US, Canada, GCC, and Southeast Asia. Buyers from Kenya, Tanzania and other parts of Africa have also reportedly shown high interest in the project.
For a detailed report on this read the articles we were featured in:
Hindustan Times – https://bit.ly/3zIyvFV
Published Date: 15 July, 2024
