NRI Investment Fuels Bengaluru's Housing Market
Bengaluru continues to be a magnet for non-resident Indian (NRI) homebuyers, who represent approximately 15% of all housing sales within the city. The IT capital's real estate market is witnessing substantial demand from NRIs based in the United States, Singapore, the UAE, Australia, and Saudi Arabia, with a clear preference for investments in 2 and 3BHK units.
Demand Trends and Regional Preferences
The United States leads the pack when considering both inquiries and finalized transactions, significantly outpacing other countries. Data from NoBroker also highlights a rising demand from NRIs situated in Singapore, the United Arab Emirates, Australia, and Saudi Arabia.
North Bengaluru emerges as the most sought-after investment destination, capturing nearly 39.7% of NRI investments. East Bengaluru follows closely behind at 37.7%, while South Bengaluru accounts for 18.1%. West and Central Bengaluru both represent smaller proportions, with 3.9% and 18.1%, respectively.
Preferred Unit Types and Micro-Markets
2 and 3 BHK apartments reign supreme, constituting a considerable 78% of NRI sales. Breaking this down further reveals that 2BHK units account for 41% of these transactions, 3BHK units claim 37%, and both plots and larger units (4BHK/duplex/villas) each command a 9% share within this subset of investors.
In terms of specific micro-markets, the eastern localities of Sarjapur, Varthpur, Gunjur, and Whitefield remain at the forefront of popularity. Devanahalli and Hebbal, located in North Bengaluru, also stand out as preferred micro-markets among NRI investors. According to Saurabh Garg, Co-founder and Chief Business Officer at Nobroker, the average property value exhibits regional variations, with approximately Rs 1.1 crore in North Bengaluru, Rs 1.51 crore in the East, and Rs 1.13 crore in the South.
Investment Motivations and Desired Services
These NRI buyers largely consist of working professionals who often seek investment properties that offer both a high rental income potential and the prospect of future appreciation. While they are reluctant to pay steep property premiums, they do, however, exhibit a strong inclination towards purchasing real estate from well-established, Grade A developers. Garg further indicated that NRIs actively look for additional services like property handling and access to qualified legal counsel to guarantee a more fluid and unhindered property transaction process.
Insights from Leading Developers
Several notable developers corroborated these trends. Concorde’s chairman, Nesara B S, confirms that NRI purchases contribute approximately 15% of their total sales, highlighting an increase from the previous figure of 10% in the past two years. “This has risen in the past two years. Previously, this stood at 10%. The highest demand comes from the Gulf countries, followed by the Indian diaspora in Europe, the United States, and Australia. Most of them are three-bedroom apartments and villas,” he stated.
Viswa Prthap Desu, COO of Residential at Brigade Group, commented on the importance of international marketing efforts, mentioning: “The majority of our bookings are either through our GCC office or through trade expos that take place abroad. We occasionally receive inquiries when they visit Bengaluru on vacation.”
Abhishek Kapoor, Group CEO of Puravankara Ltd., also emphasized the significance of the NRI segment for their business, with NRI contributions ranging between 12% and 15%. He underscores the preference of NRI buyers for more expansive homes with larger footprints, specifically within gated communities that offer comprehensive perks, robust security precautions, and efficient on-site property management provisions. “NRI contributions to our overall business range between 12 and 15%, and we are seeing increased traction in markets such as the GCC, the United States (both East and West Coast), Southeast Asia, and Europe (including the United Kingdom),” he added.