Data gathered from several consulting firms by HT Digital indicated that Bengaluru has maintained its position as the top option for non-resident Indians wishing to invest in India’s residential real estate market, particularly those seeking affordable and mid-segment homes.
The main draws for this group of homebuyers are the city’s pleasant weather, rising property values, cosmopolitan culture, high rental yields, and a bustling commercial district.
Though most non-resident Indians are drawn to the region for investment opportunities, the IT capital market is driven by end users regarding sales among domestic homebuyers.
According to Shalin Raina, Managing Director, Residential Services, Cushman & Wakefield, the data about NRI home purchases in Bengaluru shows that 35% of the transactions are for end-use, and 65% of the deals are for investment purposes.
Prooptech unicorn Among its NRI clientele, NoBroker reported a 60:40 split in favor of investing.
Developers and consultants noted that most of these purchases are the second or third additions to the portfolios owned by non-resident Indians.
“Principal Partner and Sales Director of SquareYards.com, Sharad Sharma, added that NRIs are displaying interest in senior living communities and plots, broadening their investment portfolio beyond apartments.”
From and to where exactly?
The US, UAE, and Singapore are the top three regions influencing demand from non-resident Indian buyers for the real estate projects developed by Bengaluru-based developers Concorde and Brigade.
NRI buyers account for 10% of our sales on average. “These sales occur either in India when the NRIs visit India or abroad during our events, or through our international team’s outreach,” says Viswa Prathap Desu, COO of Residential, Brigade Group.
According to Saurabh Garg, co-founder and chief business officer of NoBroker, the NRI clientele prefers to invest in reputable brand projects and high-demand rental areas, typically near IT corridors.
He mentioned that popular areas for NRI investors were Kanakapura Road in the southern part of the city, Thanisandra in the north, and Whitefield and Sarjapur Road in East Bengaluru.
According to NoBroker data, the average price of a property currently ranges between Rs 9,000 and Rs 12,000 per square foot in these areas.
Others mentioned the proximity to the airport, the presence of Grade A developers, and the reasonably priced real estate in Hebbal and Devenahalli as reasons why they are desirable choices for NRIs.
According to the report, more than 55% of purchasers also sign up for property management services at the time of purchase.
What draws in this particular group of clients?
Developers and property consultancies shared that, contrary to popular belief, NRIs purchasing real estate in the IT capital have demonstrated, NRIs purchasing real estate in the IT capital have demonstrated a greater preference for mid-range and affordable homes.
Approximately 69% of the NRI transactions made possible by SquareYards.com involved affordable and mid-range housing, which includes apartments under Rs 1 crore. According to Ravi Shankar Singh, Managing Director, Residential Transaction Services, Colliers India, 70% of the unit level demand for real estate consultancy Colliers has been in the range of Rs 1.5 to 2 crore.
Brigade Group’s Desu claims that the class of NRI workers in the clerical and administrative fields is the main source of demand in the affordable and mid segments. With their savings, these workers purchase a 2BHK or a small 3 BHK apartment, which they can either move into when they return to India or use as a rental.
However, C-suite executives like villas and the mid-segment draw techies who typically choose a 3BHK, according to Kranti Alladi, Head of Sales and Marketing at Concorde.
Two main depressants are poor infrastructure and heavy traffic.
The city’s traffic problems and infrastructural problems have been the biggest deterrents for NRI investors, despite Bengaluru’s strong demand and high rental yields helping the city dominate its choices.
“One of the primary deterrents for NRI property purchases in Bengaluru is traffic congestion, which has been consistently identified as a significant concern,” said Rana.
Others concurred. “Purchasing a home in an establishment is another barrier. However, finding inventory at their preferred location presents a challenge, as noted by Garg of NoBroker.
Across the nation, NRI’s interest in the housing market is growing.
In North India, the tale is the same. Approximately 14% of DLF’s total sales in the fiscal year 2022-2023 came from NRI investors, with the GCC, USA, UK, and Singapore contributing significantly to the company’s sales exceeding Rs 2,000 crore. DLF is based in Gurgaon. It anticipates a 20% increase in this fiscal year.
25% of sales (or about Rs 1,800 crore) for the company’s most recent project, DLF Privana South, came from NRI markets, with the US and Canada, Southeast Asia, and the GCC making major contributions. Aakash Ohri, Joint Managing Director and Chief Business Officer, of DLF Home Developers Ltd., told Hindustan Times Digital from Africa, particularly from Tanzania and Kenya, showed interest in the project.