A prominent measure of the success of a real estate market is how much NRI or the international clients it attracts. If we talk about the real estate landscape in India, which continues to evolve, Bengaluru and Mumbai stand out as hotspots global for Non-Resident Indian (NRI) investments. These cities offer a compelling mix of factors, from stable markets to expanding opportunities, attracting NRIs seeking lucrative real estate prospects.
Rising Rental Yield: The top reason for the success of Bengaluru real estate investors is the increasing rental yield. As more people flock to the city to make a home the market stability makes it a prime choice for NRI investments. This increases the demand for rental properties and hence the rental returns.
Horizontal Expansion Potential: The city’s potential for horizontal expansion and the emergence of micro markets promise attractive returns, drawing in savvy investors. Unlike most cities around the world due to lack of space, expansion is rather vertical. This gives an edge to the outer regions of the city when they get occupied sooner or later, securing the investment people made at lower prices.
Vibrant Ecosystem: Bengaluru’s dynamic ecosystem, attracting global businesses and talent, intensifies housing demand, thus augmenting prices. This is a unique case for top-tier cities which attract more people and thus increase the demand.
Commercial and Luxury Properties: Mumbai presents a dynamic mix of commercial and luxury residential properties, capturing the attention of discerning NRIs. It gives the investors freedom to choose where they want to invest their money and how.
Growing NRI Contributions: NRIs, who contributed 10% to real estate investments in 2019-20, are estimated to escalate this to 17% by 2025, signifying increasing interest owing to the factors mentioned above.
Diverse NRI Interests:
Expanding Asset Classes: NRI interest encompasses a broad spectrum, ranging from residential to commercial properties, and extends to emerging asset classes like data centres. This diversification aims to broaden investment portfolios, reflecting a growing trend among Non-Resident Indians to explore varied avenues within the real estate market.
Purpose of Purchase: The intent of buying a new property is of integral value as it establishes why the investment is flowing in. Statistics show that 57% of NRIs aim to acquire property for personal use, while 43% intend it for their families in India.
Demand and Preferences:
When we look into the data regarding real estate there are a few things that stand out.
Preferred Property Types: Demand trends in the real estate market showcase a preference for expansive 3BHKs valued over Rs 1 crore within gated communities, echoing the inclinations observed among NRIs. The preferences lean towards spacious accommodations, specifically those exceeding the Rs 1 crore mark, nestled within secured, gated societies.
Top Investor Countries: It is interesting to note that countries such as UAE, the US, and Singapore are the top players when it comes to NRI investments, exerting a significant influence on the Indian real estate landscape.
Challenges and Opportunities:
Transparency Concerns: Every market has bottlenecks and solving them may lead to reaching major heights. Amongst all the ongoing challenges consumers face in the industry, 82% express concerns about the lack of transparency in real estate transactions, pointing out crucial areas requiring enhancements.
Interest in Professional Management: Moreover, there is a keen interest in professional property services among 52% of NRI property owners for hassle-free management. Indicating a market yet to be fully explored.
Bengaluru continues to entice NRIs with its diverse offerings, from stable markets to a wide array of property choices. However, challenges like transparency issues highlight areas for enhancement, suggesting that there lies a plethora of opportunities for growth and innovation in India’s real estate sector. As NRIs increasingly contribute to this sector, they remain prominent investors in this sector and facilitating an easy NRI investment procedure – will prove to be beneficial for investors and the industry in the future.