Bengaluru: Top Choice for NRI Investment in Budget and Mid-Range HousingBengaluru: Top Choice for NRI Investment in Budget and Mid-Range Housing Data from multiple consultancies indicate that Bengaluru remains the top destination for non-resident Indians (NRIs) seeking to invest in India’s housing market, particularly in the budget and mid-range segments. Factors Attracting NRIs: * Pleasant climate * Property appreciation * Cosmopolitan culture * High rental yields * Thriving commercial landscape NRI Investment Patterns: * 65% of property transactions by NRIs in Bengaluru are for investment purposes, with 35% for end-use. * Most investments are second or third additions to NRI portfolios. * Diversification beyond apartments to senior housing and land. Source and Destination of NRI Buyers: * US, UAE, and Singapore are the top source regions for NRI demand. * Popular investment locations within Bengaluru include Whitefield, Sarjapur Road, Thanisandra, Kanakapura Road, Hebbal, and Devanahalli. Appealing Features for NRIs: * Preference for affordable and mid-segment housing (units priced below ₹1 crore). * 2 BHK and compact 3 BHK homes for rental income or potential relocation. * 3 BHKs for tech professionals, while villas for top executives. Infrastructural Concerns: * Traffic congestion and infrastructural issues pose a significant deterrent for NRI investors. * Preference for familiar locations but limited inventory availability in those areas. Growing NRI Interest Nationwide: * Other cities experiencing increasing NRI interest in housing include Gurugram, where DLF has seen a 14% contribution from NRIs in fiscal 2022-23. * DLF’s Privana South project attracted 25% of its revenue from NRI markets, with buyers from Africa showing interest for the first time.
Data from multiple consultancies by HT Digital shows that Bengaluru continues to be the top choice for non-residents in India looking to invest in the Indian housing market, especially for those looking for budget and mid-range housing.
Bengaluru maintains its status as the top choice for non-resident Indians looking for budget and mid-range housing (representative photo)(Pexels) {{^userSubscribed}} {{/userSubscribed}} {{^userSubscribed}} {{/userSubscribed}}
The city’s pleasant climate, property appreciation, cosmopolitan culture, high rental yields and thriving commercial landscape are the main attractions for this group of home buyers.
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While the IT capital is primarily an end-user market in terms of sales to domestic homebuyers, the region is also attractive to a majority of non-resident Indians for investment opportunities.
In Bengaluru, data on residential property purchases by NRIs facilitated by Cushman & Wakefield shows that 65% of transactions are for investment purposes and 35% are for end-use, says Shalin Raina, Managing Director, Residential Services at Cushman & Wakefield.
Proptech unicorn NoBroker announced a 60:40 split, in favor of investments, among its NRI clients.
Most of these acquisitions are second or third additions to the portfolio of NRIs, developers and consultants.
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“NRIs are diversifying their investments beyond just apartments and showing interest in senior housing and land,” added Sharad Sharma, Principal Partner and Sales Director, SquareYards.com.
Where from and where to?
Concorde and Brigade, Bengaluru-headquartered real estate developers, named the US, UAE and Singapore as the top three regions where demand for their projects from NRI buyers is highest.
“Normally, 10% of our sales come from NRI buyers. These sales happen in India when the NRIs visit India or abroad during our events or through the outreach of our international team,” said Viswa Prathap Desu, COO, Residential, Brigade Group.
NRI clients prefer to invest in areas with high rental demand, largely located near IT corridors, and in projects developed by renowned brands, explains Saurabh Garg, Co-Founder and Chief Business Officer, NoBroker.
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Also read: Non-resident Indians from US dominate property sales in Bengaluru; 2BHK and 3BHK homes are most popular
He named Whitefield and Sarjapur Road in East Bengaluru, Thanisandra in North Bengaluru and Kanakapura Road in the southern part of the city as popular locations among NRI investors. Currently, average property prices range between ₹According to NoBroker data, prices in these areas are 9,000-12,000 per square foot.
Also read: Brigade Group plans to launch over 6.5 million square feet of residential projects in Bengaluru and Chennai; Invest ₹2700 kr
Others cited Hebbal and Devanahalli as attractive options for NRIs due to their proximity to the airport, presence of top-notch developers and relatively affordable property prices.
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According to Garg, more than 55% of buyers also sign up for property management services during the purchase process.
What appeals to this group of customers?
Contrary to popular belief, NRIs acquiring real estate in the IT capital are giving greater preference to affordable and mid-segment housing, according to insights from developers and real estate consultants.
Approximately 69% of the transactions that SquareYards.com facilitated among NRIs fell into the affordable and mid-market housing segments, consisting of homes priced below $100,000. ₹1 crore. Meanwhile, for real estate consultancy Colliers, 70% of the demand is for units in the price range ₹1.5 to 2 crore, said Ravi Shankar Singh, Managing Director, Residential Transaction Services, Colliers India.
Most of the demand in the affordable and mid-range segment comes from the white-collar class of NRI workers, who invest their savings in a 2 BHK or a compact 3 BHK home with the intention of earning rental income or moving into it when they return to India, explains Brigade Group’s Desu.
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Also read: Delhi-NCR Real Estate Market: Here’s Why Wealthy Indians Are Embracing Luxury Properties
On the other hand, the mid-market segment attracts techies, who generally opt for a 3 BHK, while top executives prefer villas, says Kranti Alladi, Head of Sales and Marketing, Concorde.
Infrastructure problems and traffic congestion are major dampeners
While Bengaluru is the most popular choice among NRI investors due to strong demand and high rental yields, the city’s infrastructural issues and traffic congestion are the biggest hindrances for this group of buyers.
“One of the major barriers to NRI property purchases in Bengaluru is traffic congestion, which is consistently identified as a major problem,” Raina said.
Others agreed. “Another deterrent is that they prefer to buy a home in a place they are familiar with. But the availability of inventory is a challenge for their preferred location,” NoBroker’s Garg pointed out.
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Also read: Goa remains the top choice for wealthy Indians to invest in holiday homes
NRI interest in housing market is increasing across the country
In North India, the story is no different. In fiscal 2022-23, Gurugram-based DLF posted a turnover of over ₹2000 crore from NRI investors, accounting for about 14% of total revenue, with notable contributions from GCC, US, UK and Singapore. This financial year, the company expects this to increase to 20%.
The company’s recent project, DLF Privana South, saw 25% of its turnover (approx. ₹1,800 crore) from NRI markets, with significant contributions from the US-Canada, Southeast Asia and the GCC. Buyers from Africa, particularly Tanzania and Kenya, have shown interest in the project, Aakash Ohri, Joint Managing Director and Chief Business Officer, DLF Home Developers Ltd, told Hindustan Times Digital.
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Also read: DLF’s Privana South attracts NRIs from across the world, including Africa for the first time
News / Property / Bengaluru is the best choice for non-resident Indians looking for budget and mid-range housing
