Mumbai, Bengaluru properties appeal to NRIs

The developers in India have a reason to smile as NRIs are finding properties in metros like Mumbai and Bengaluru more appealing, which is helping them build their dream home. The Indian luxury property market scores higher points for NRIs as it promises a high standard of living to them if they chose to return to their country of origin.
Rahul Maroo, CEO of Omkar 1973 in Worli, said: "[The] reason [for this is] being the depreciating rupee, which puts more rupees in NRIs' hands, are making properties cheaper for them than they were e Warlier. Positive factors like ongoing regulatory reforms with the likes of Rera, and better rental yields is attracting NRIs to invest in properties in India largely in Mumbai."
Rentals can be decent if the property is located in a prominent employment hub. Dubai resident Sai Visweswaran said: "Real estate is most viable and reliable investment after Rera coming in. I have invested in a luxury property near the airport in Bengaluru purely from a returns on investment [ROI] perspective. Considering the upcoming commercial development in the nearby area, the expected ROI is between 3 per cent to 5 per cent over the years."
The overall unsold inventory of luxury homes (priced ?15 million to ?25 million) declined by 12 per cent to 42,650 units in the first quarter of 2019 from 48,300 units in the year-ago period.
Bengaluru led, recording a significant 49 per cent reduction in unsold luxury stock within a year,  from 6,370 units in the first quarter last year to 3,260 units in the same period in 2019. It was followed by Kolkata with a 37 per cent decline in unsold luxury stock. The ROI for luxury and ultra-luxury homes is around 3-5 per cent and 2-3 per cent, respectively. Concurrently, unsold stock in the affordable segment saw an increase of nearly 3 per cent as maximum new launches catered to this segment during the period.
One major feature distinguishing luxury and ultra-luxury properties between various cities is its price range. For instance, properties priced greater than ?15 million are considered ultra-luxury in Bengaluru while in Mumbai properties priced above ?40 million fall into this category.
Historically, NRIs typically bought luxury homes either for good ROI or for their self-use. After a prolonged wait-and-watch period after the recent reform changes in the Indian real estate market, the trend is now decidedly skewed towards personal use.
The most convincing incentives for NRIs to invest in luxury and ultra-luxury properties are higher potential for capital appreciation for properties located in prime areas; and higher and steady cash flow (via rental income) of properties in prime areas as against affordable housing in far-flung areas.
Anarock's recent consumer sentiment survey also indicates that 28 per cent NRI respondents are looking to buy luxury and ultra-luxury properties (priced ?15 million onwards) across cities.
The survey also indicates that 31 per cent of NRIs currently prefer to invest in a property in Bengaluru. While Bengaluru remains the favoured destination for NRIs to invest in luxury real estate, the Mumbai Metropolitan Region (MMR) is not far behind.
Dubai resident Sushanth Monteiro a Emirates cabin crew, said: "I had invested in a luxury project a year back from an investment point of view. Today, not only the property has given me appreciation but I havemoved-in in the apartment. Whenever I am in India, I prefer staying at my own house. The project is also near to the airport, which saves lot of travel time."
Property prices in the luxury and ultra-luxury segments in MMR range between ?40,000-90,000 per sqft on carpet area, while in the National Capital Region they hover between ?12,000-?20,000 on built-up area. In Bengaluru, prices range between ?7,500- ?14,000 per sqft on built-up area.
Srinivasan Gopalan, CEO of Ozone Group, said: "The upmarket luxury residential segment has been steadily growing and the cities like Bengaluru and Mumbai have always been the preference. Most affluent people want to be present in Bengaluru through their residences. It is emerging as a new club of rich and mighties where such people want to share platforms with their counterparts, explore more networking opportunities for business or family reasons." - sandhya@khaleejtimess.com