In the recent past, Bangalore turned out to be a popular investment destination for NRIs. The growth of luxury properties and villas in Bangalore has been possible mainly for the contribution from this segment. As the value of rupee is falling every year and foreign exchange is becoming stronger, the numbers of NRIs expressing interest in buying residential property in Bangalore is growing. The expansion of the job market, favourable climate and steady rise in capital rates has made the residential market attractive for this segment. A wide variety of luxury residential options and villas in Bangalore are offered for NRIs to pick from. These properties also offer respectable lifestyle quotient.
The properties that are targeted by NRIs can be classified into 2 categories:
1. Premium projects that are coming up in the suburbs
2. Premium locations that exist currently within the city
Premium locations that exist already
There are quite a few old and classy neighbourhoods in Bangalore are continuously retaining NRI attraction for their higher end tag. They offer lifestyles that are comparable to what NRIs experienced abroad and they have established social fabric.
Some of the upmarket neighbourhoods in North Bangalore are Sadashivanagar, Jayamahal, Dollars Colony, RMV IInd state, Hennur Road and Bellary Road are good enough target areas of NRIs. Localities in South Bangalore that attract buyers are JP Nagar III Phase, Dollar Colony (close to JP Nagar III Phase), Jayanagar, Indiranagar and Koramangala located towards the east. Some of the older areas of Bangalore include Vittal Mallya Road, Lavelle Road, UB City and sections of Residency Road.
These localities still hold onto their premium tags mainly for the convenience and lifestyle provided by them. These layouts are large and highly planned. The roads are laid out well and broad enough. A line of trees runs along the roads and the plots are large landed areas.
Premium locations that are coming up
Most of the suburbs of East, South and North Bangalore form this segment primarily. Some of the localities that NRIs prefer are Hennur Road, Whitefield and Thanisandra Road. Most of these localities are close to important tech parks where a lot of luxury residential projects are taking off. The advantage offered by these projects is that they are mostly gated communities and come with amenities that have been planned well such as terrace gardens, swimming pools, club houses and cycle lanes. The main problem with these properties is that a lot of them are devoid of access to water supply and must rely on bore wells for tapping shrinking ground water levels in Bangalore.
Potential of Appreciation
Given the restricted supply in the near future and present, locations such as Richmond Road, VittalMallya Road, Ulsoor Road, Richmond Road, Cunningham Road, Sadashivanagar, Koramangala, Jayanagar and Indiranagar shall continue to hold their positions of being premium locations.
The upcoming localities of the suburbs should see a hike in capital values because of the infrastructural development that has been planned around and in the area.
NRIs nowadays prefer to invest in the real estate sector of India mainly because of the development that the sector has undergone. Both individuals and business houses look to invest in this sector now. NRIs want to invest in their homeland now that investing in India is not as expensive to them as it used to be before. In 2014 itself, it has been estimated that NRI investments in real estate India would increase by 35 percent almost. Because of the ascent of a proactive and strong government in the centre and the encouraging fiscal budge, the NRI populace is becoming encouraged to invest. The stock market too has shown encouraging trends. Within a couple of weeks of announcement of the election results, the BSE hit the level of 25,000 points. The Realty Index by BSE has gained above 74 percent in the past 9 months. It used to be most poorly performing index of India after the global financial crisis.
Rise in urbanisation and favourable demographics mean well for the residential real estate sector. PIOs and NRIs are permitted by Indian laws to invest in residential and commercial segments. Laws of India also permit profit repatriation that comes from property sales after paying a long term capital gain tax of 20%. PIOs and NRIs are also eligible for tax waivers are their capital gains are pumped into other properties.
The stable government, FDI norm relaxation and investor friendly market have made people more optimistic about India’s realty market. Investors are eagerly awaiting the new central government’s initiatives for implementing infrastructure projects, tax regime rationalization for both commodities and securities transaction tax alongside other reforms. There has been an upsurge in this trend and it is expected to go up in future too. Which are the most preferred residential investment destinations of India for NRIs? As per several reports, Bangalore has been termed to be the most favourable property investment location for NRIs and PIOs, followed closely by Ahmedabad, Chennai, Pune, Delhi, Goa and Dehradun.
NRIs and PIOs usually buy properties in India for investment or for self-use. The first time round, they prefer to invest in their home towns and cities. The next round of investment is meant for cities which show the highest growth potential when it comes to job creation and ensuing property demand. Some of these cities where NRI investments are received are Chennai, Bangalore, Coimbatore, Pune, Hyderabad, Kochi and NCR Delhi.
Reports have also suggested that enquiries pour in mostly from NRIs living in UAE, US, Australia, Singapore, Canada, South Africa and UK. In 2014, it has been seen that demand is more titled towards commercial buildings and higher end properties. NRIs want to buy properties that generate income for them. Residential properties that can bring high rental rates are mostly favoured by the NRIs. They are more affordable and also offer low risk. NRIs with risk appetite and finances also invest in leased out office spaces marked at Grade A in primary cities. To look for the best properties simply log into online classifieds which list properties from all over India.