by THO
Bengaluru has held on to its status as the top choice for non-resident Indians looking to invest in India’s residential real estate market, especially those eyeing budget and mid-segment housing, data sourced from multiple consultancy firms by HT Digital showed.
The city’s pleasant weather to property value appreciation, cosmopolitan culture, high rental yields and a thriving commercial landscape are the major pull factors for this set of homebuyers.
However, while the IT capital is primarily an end-user driven market with regards to sales amongst domestic homebuyers, the geography appeals to a majority of non-resident Indians for investment opportunities.
In Bengaluru, the data specific to NRI home purchases facilitated by Cushman & Wakefield indicates that 65% of the transactions are for investment purposes, while 35% are for end-use, said Shalin Raina, Managing Director, Residential Services, Cushman & Wakefield.
Proptech unicorn NoBroker stated a 60:40 split, in favour of investment, amongst its NRI clientele.
A majority of these purchases are a second or third addition to the portfolio held by NRIs, developers and consultants underscored.
“NRIs are diversifying their investments beyond apartments, showing interest in senior living communities and plots,” added Sharad Sharma, Principal Partner and Sales Director, SquareYards.com.
Where from, and where to?
Bengaluru-headquartered realty developers Concorde and Brigade listed the US, UAE and Singapore as the top three geographies driving demand from NRI buyers in their projects.
“Typically, 10% of our sales come from NRI buyers. These sales happen either in India when the NRIs visit India or abroad during our events, or through our international team’s outreach,” said Viswa Prathap Desu, COO, Residential, Brigade Group.
The NRI clientele prefers to invest in areas with high rental demand, largely close to the IT corridors, and in projects developed by reputed brands, explained Saurabh Garg, co-founder and chief business officer of NoBroker.
He listed Whitefield and Sarjapur Road in East Bengaluru, Thanisandra in North Bengaluru and Kanakapura Road in the city’s southern end as popular localities amongst NRI investors. Presently, average property prices range between ₹9,000-12,000 per square feet in these areas, according to NoBroker data.
Others named Hebbal and Devanahalli as attractive options for NRIs due to their proximity to the airport, presence of Grade A developers, and relatively affordable property prices.
Over 55% of the buyers also sign up for property management services during the time of purchase, Garg said.
What appeals to this set of customers?
Contrary to popular belief, NRIs acquiring real estate in the IT capital have shown greater preference for affordable and mid-segment homes, insights shared by developers and property consultancies revealed.
About 69% of the transactions facilitated by SquareYards.com amongst NRIs fell in the affordable and mid housing segments, comprising units priced under ₹1 crore. Meanwhile, for property consultancy Colliers 70% of the unit level demand has been in the price range ₹1.5 to 2 crore, said Ravi Shankar Singh, Managing Director, Residential Transaction Services, Colliers India.
A majority of the demand in the affordable and mid segments comes from the clerical and administrative class of NRI workers, who channelize their savings into a 2 BHK or a compact 3 BHK unit, with an intention of reaping rental returns or to move in once they return to India, explained Brigade Group’s Desu.
Also Read: Delhi-NCR’s real estate market: Here’s why rich Indians are lapping up luxury properties
On the other hand, the mid-segment attracts techies who usually opt for a 3 BHK, while C-suite executives prefer villas, said Kranti Alladi, Head Sales and Marketing, Concorde.
Infrastructure issues and traffic congestion major dampeners
While robust demand and high rental yields have helped Bengaluru dominate choices of NRI investors, the city’s infrastructural issues and traffic woes have been the strongest dampeners for this set of buyers.
“One of the primary deterrents for NRI property purchases in Bengaluru is traffic congestion, which has been consistently identified as a significant concern,” said Raina.
Others agreed. “Another deterrent is that they prefer to buy a house in a locality that they are well versed with. But availability of inventory is a challenge for their preferred location,” highlighted NoBroker’s Garg.
Also Read: Goa remains the top choice for rich Indians to invest in vacation homes
NRI interest in the housing market on the rise across the country
The story is no different in North India. In the fiscal year 2022-2023, Gurugram-based DLF achieved sales exceeding ₹2000 crore from NRI investors, constituting approximately 14% of total sales, with notable contributions from the GCC, USA, UK, and Singapore. This financial year it expects it to rise to 20%.
The company’s recent project, DLF Privana South, saw 25% of sales (approximately ₹1,800 crore) originating from NRI markets, with significant contributions from the US-Canada, Southeast Asia, and the GCC. Buyers from Africa, specifically Tanzania and Kenya, evinced interest in the project, Aakash Ohri, Joint Managing Director and Chief Business Officer, DLF Home Developers Ltd, told Hindustan Times Digital.
Also Read: DLF’s Privana South attracts NRIs from across the world, including Africa for the first time
