Some of the recent trends in the Indian property market, seem to suggest that non-resident Indians (NRIs) are shifting their investment from Bengaluru to Coimbatore and Kochi, owing to the lower ticket size in these two cities. However, this trend is neither Bengaluru-specific, nor does it reveal the complete story. For example, in Delhi-NCR also, the NRI investment is shifting from the luxury destination of Gurgaon to Noida. In the west, NRI investment is shifting from Mumbai to Pune.
Does it mean that the leading cities like Bengaluru, are losing out to the emerging destinations? Nikhil Hawelia, managing director of the Hawelia Group, disagrees.
“Among the NRIs, we need to differentiate between the retiring NRIs who are coming back to India and the professional NRIs who are shifting back to India. A majority of the NRI home buyers today, are professionals and they are still bullish on the traditional business destinations like Bengaluru, Gurgaon or Mumbai. However, retiring NRIs are opting for Coimbatore, Noida or Pune, owing to the lower ticket size, cost of living and better climatic conditions in these cities, or the fact that it may be their home towns,” explains Hawelia.
The role of the IT/ITeS sector
Manju Yagnik, vice-chairperson of the Nahar Group, concurs that Bengaluru is still the top choice for NRIs, despite infrastructure bottlenecks.
Bengaluru and other cities in Karnataka, have 44 new projects being developed, worth Rs 90,000 crores, she points out. “Flyover and underpass projects, including elevated roadways for Bengaluru, will be worth Rs 20,000 crores. This growth in infrastructure and the real estate sector, contributes positively towards influencing NRIs to invest in Bengaluru’s property market. Moreover, according to an Assocham report, the growing number of IT/ITeS companies in Bengaluru, provide good job opportunities to NRIs who plan to settle down in India,” adds Yagnik.
Kaizad Hateria, brand custodian and chief customer delight officer, Rustomjee Group, maintains that Bengaluru’s IT/ITeS industry is attracting a large talent pool from across the country and even techies from abroad. The city also has good physical and social infrastructure and educational institutes.
“Bengaluru has become a hub for NRIs and high net-worth individuals (HNIs). It also has a large base of expatriates. Growth in the IT industry, the increasing number of HNIs and movement of expatriates, have brought Bengaluru’s real estate market in to prime focus for NRIs,” says Hateria.
With its ability to attract IT professionals, the demand for office space in Bengaluru, far exceeds the national average. Another critical factor that attracts NRI buyers, is the cost of housing.
One can buy a decent house in Bengaluru, for Rs 6,000 per sq ft, while the same would cost no less than Rs 17,000-18,000 per sq ft, in other traditional business destinations for NRIs, like Mumbai or Gurgaon.
The state’s cabinet has also cleared an action plan of Rs 7,300 crores, to be implemented over the next two years. The Karnataka government is also focusing on other infrastructure developments, pertaining to the Peripheral Ring Road, metro rail, signal-free ORR, a high-speed rail link, monorail and an elevated expressway. Thus, while retiring NRIs may prefer properties in other cities, for a majority of the NRIs in general and professionals in particular, Bengaluru remains a preferred choice to buy a property and settle in the city.
Bengaluru’s attraction, for NRIs
- Bengaluru is the number one choice of property market, for NRIs.
- NRI professionals still bullish on Bengaluru, for shifting into India.
- IT/ITeS professionals form a major chunk of the NRIs settling in the city.
- Only retiring NRIs opt for alternate locations.
(The writer is CEO, Track2Realty)