Bengaluru continues to be the preferred destination for non-resident Indians (NRIs) investing in India’s residential real estate, particularly in the budget and mid-segment housing markets. According to data from various consultancy firms, Bengaluru stands out for its attractive property investment opportunities, driven by its pleasant weather, appreciating property values, cosmopolitan culture, high rental yields, and thriving commercial sector.
Investment Trends and Preferences
A significant 60% of NRIs buying property in Bengaluru are doing so for investment purposes, with 40% seeking homes for personal use. Shalin Raina, Managing Director of Residential Services at Cushman & Wakefield, reveals that 65% of NRI transactions are investment-driven, while 35% are for end-use. Proptech firm NoBroker also reports a 60:40 split in favor of investment among its NRI clients.
Popular Localities for Investment
NRIs show a preference for areas with high rental demand, particularly near IT hubs. Key investment areas include Whitefield and Sarjapur Road in East Bengaluru, Thanisandra in North Bengaluru, and Kanakapura Road in the south. These localities offer property prices ranging between ₹9,000-12,000 per square foot. Other attractive options include Hebbal and Devanahalli, known for their proximity to the airport and affordable property prices.
Types of Properties and Buyer Profiles
Contrary to expectations, NRIs are leaning towards affordable and mid-segment homes. According to SquareYards.com, 69% of NRI transactions are in the affordable and mid-segment categories, with properties priced under ₹1 crore. Colliers India reports that 70% of unit demand falls in the ₹1.5 to ₹2 crore range. The affordable segment attracts clerical and administrative NRI workers seeking rental returns or future personal use, while mid-segment properties appeal to tech professionals and executives preferring larger homes or villas.
Challenges and Considerations
Despite its popularity, Bengaluru faces challenges such as traffic congestion and limited inventory in preferred locations, which can deter potential buyers. Raina highlights traffic issues as a significant concern, while NoBroker’s Saurabh Garg notes that NRIs often struggle with finding suitable properties in their preferred areas.
Rising NRI Interest Across India
Bengaluru’s dominance mirrors a broader trend in India’s real estate market. In North India, for example, DLF’s sales to NRI investors reached ₹2000 crore in the fiscal year 2022-2023, with projections for a rise to 20% this year. DLF Privana South saw 25% of its sales from NRI markets, including notable contributions from the US, Canada, Southeast Asia, and Africa.
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