The Non-Resident Indian (NRI) community has witnessed a massive shift in their investment patterns in the last couple of years. The challenge associated with disposing of the high-end units and limited new options have substantially altered their investment preference towards the mid-income segment and affordable homes. Let’s look at the popular markets that make good investment bets for the NRI community in the affordable segment.
The Non-Resident Indians (NRIs) had been perpetually on the lookout of investment opportunities that ensured higher Returns on Investment (ROI), and amongst all the probable options available, the Indian real estate had been the most suitable choice. While the trend continues, the preferences of NRI homebuyers have changed in the wake of altering market policies.
From luxury housing units, the investment pattern of NRI investors is gradually moving towards the affordable and mid-income categories. Rakesh Reddy, Director, Aparna Constructions & Estates Pvt. Ltd averred that NRI investors prefer to invest in properties that offer higher capital returns and as the balance has tilted in favour of competitively priced units in both the rental and the capital market, NRI investors have also showcased increased interests towards the segment. Besides, the challenge pertaining to disposing the high-end units and sliding value of Rupee has also governed the trend. The developer community is also realigning its product portfolio in tandem with market demand and offering varied choices in the preferred category.
Some of the few cities that offer ample choices in affordable units and are worth considering for NRI investment include:
Thane (Mumbai Metropolitan Region)
Speaking of the residential investment in Thane, Ghodbunder (GB) Road is the most viable option mainly due to an array of residential choices in both the under-construction and the ready-to-move segment. According to 99acres.com, over 3,000 ready-to-move and nearly 650 under-construction units are available for sale along the stretch. The other most conspicuous factor is the steadily growing property prices along the GB Road. The average capital ‘asks’ along the stretch have surged by over 20 percent in the preceding five years. Currently, the property prices along the belt are pegged at Rs 9,130 per sq ft. Moreover, GB Road’s proximity to nature, coupled with the proposed infrastructure developments, further makes it an ideal investment destination. Currently, a 32 km-long metro corridor has been planned to run from Wadala (Mumbai) to Kasarvadavali (GB Road).
Rakesh Chaudhary, Property Agent, Nestseekers, says that the commercial hubs of Hinjewadi and Baner and the ultra-residential pocket of NIBM Road are some of the most suitable housing locales for NRI investors in Pune. Firstly, these areas are inundated with a plethora of residential prospects in the affordable segment and secondly, they offer high livability quotient. For instance, more than 60 percent of the residential inventory for sale in Hinjewadi is priced within Rs 60 lakh. Likewise, NIBM Road and Baner also offer a host of quality projects under the budget of Rs 75 lakh.
Moreover, since NRIs prefer to invest with reliable and organised builders, engrossed in transparent business practices, these areas become more appropriate. Some of the renowned developers present in these micro-markets include Kolte Patil, Pride Centurion and Shapoorji Pallonji.
Bangalore has been one of the most active residential markets for NRI investors in the last two years. An industry report reveals that of the total NRI investments captured in the previous two years, nearly 31 percent have been in Bangalore. The unprecedented commercial growth, burgeoning start-up culture, robust immigration, stable government and more organised builders assured buoyancy in the real estate market of the city.
Farrokh Khyser, a city-based realty agent, Planets Properties, shared, “Key micro-markets that offer more befitting options for NRI investors in Bangalore include Electronic City, Bannerghatta Road, Kanakapura Road and Devanahalli, situated in proximity to the airport. These areas are replete with sound infrastructure facilities and much to delight the property prices are also fairly attractive. On average, the capital ‘asks’ in these areas vary between Rs 4,500 per sq ft and Rs 5,000 per sq ft.”
Valasaravakkam, one of the newer residential pockets, is the most propitious investment option for foreign players willing to earn higher capital returns in future. The development onslaught coupled with the proximity to the airport and IT boom makes it the most rewarding locale from an investment standpoint. The capital values in the micro-market have grown to the tune of 10-15 percent, YoY. Besides, Guduvanchery on the Grand Southern Trunk (GST) Road is also a potential destination as shared by Ramesh, Property Broker, Green City Developers. Factors such as the development of IT parks and numerous educational institutes along with the increased inflow of migrant populace are spearheading Guduvanchery as a prime housing hub in the city.
As more organisations set up their offices in Hyderabad, the investment sentiment in the city has gradually augmented. Both domestic and NRI investors have shown increased curiosity. However, not only the popular pockets of yesteryears but peripheral locations have also seen increased traction from NRI buyers. For instance, Tellapur, Chandanagar and Nanakramguda have seen a substantial rise in their NRI enquiries over the last year. Home to various IT majors, these pockets offer numerous options to investors in the form of residential apartments and plots. Average capital values in these micro-markets have doubled in the last five years and vary between Rs 4,100 per sq ft and Rs 6,100 per sq ft.
While the NRI investment has witnessed a downtrend between 2015 and 2017, the sentiments have improved after the dust around the Real Estate (Regulation and Development) Act, 2016 (RERA) settled. Currently, the segment is still in its recuperating phase; however, it is likely to follow a growth trajectory in the near term as the Indian real estate industry evolves with increased transparency and digitisation of land records.