Why Is Bangalore NRIs Favourite Investment Destination?

Bangalore: The slow economic growth and fluctuating rupee-dollar price is alluring NRIs to park their investments in real estate sector of India’s IT hub, Bangalore. According to Ganesh Vasudevan, Vice President and Business Head, Indiaproperty, "There couldn't be a better time for high net worth individuals (HNIs) to invest here." He also said that “Purely based on the rupee-dollar fluctuation, the value of property has decreased by upto 8-10 percent effectively. Those looking at investing back in India can make use of the 10 percent depreciation in the value of the rupee to build their investment portfolio," reports Economic Times.

The city becomes a favourite investment destination for people who are living abroad. Avinash Rao, Regional Director - South, Knight Frank India stated that Bangalore has become a known destination for NRIs to buy property, mainly because of pricing and product offerings. He further stated that "the real or actual impact of the rupee-dollar crisis cannot be assessed in the short term, hence it will be some time before the real impact starts showing up."

Bangalore’s real estate sector is offering number of options to fulfill buyer’s requirement. For instance, developers are providing an excellent blend of affordable villas, premium apartments, and row/town houses, among others. The city is offering multiple options in pricing which allows investors to fix the best value. However, the scenario is not that the property prices are too low or the return on investment is poor, it is more like the prices are constant with good return on investment.

Some of the preferred localities of the city that are attracting investors are Banashankari, Kanakapura Road, Bannerghatta Road, Hosur Road, Sarjapur Road, Outer Ring Road, Marathahalli, Old Madras Road, Hebbal, Yelahanka, Thannisandra Road, Bagalur Road, and Bellary Road.

According to Rao,"Factors driving demand in the city include the end-users working with the services and manufacturing companies, investors from other cities, and NRIs. While supply infusion in the market last year was about 20,000 residential units, almost 18,000 units were absorbed. Areas like Sarjapur Road, Outer Ring Road, Bannerghatta Road, Kanakapura Road, Old Madras Road, Yelahanka and Bellary Road accounted for most of the upcoming units. In 2012, the estimated supply infusion is about 22,000 residential units.”

Rao further explains that "Importantly, there are factors like developers developing new projects clearly targeting the NRI segment. These projects offer facilities and amenities similar to the ones NRIs are familiar with abroad and hence they don't have to make significant changes in their lifestyles. Availability, affordability and good standard of living are the key factors driving demand.”