Bengaluru, the vibrant capital of Karnataka, continues to be the hottest property destination for Non-Resident Indians (NRIs) seeking investment opportunities in the Indian residential real estate market. Unlike their domestic counterparts who prioritize owning their primary residence, NRIs are drawn to Bengaluru's affordability, potential for high rental yields, and thriving commercial scene.

This blog delves into the key factors driving NRI interest in Bengaluru's real estate market, explores popular investment pockets, and analyzes the specific property segments attracting NRI buyers.

Why Bengaluru? A Melting Pot of Attractions

Several factors contribute to Bengaluru's allure for NRI investors:

1. Pleasant Weather: Enjoyable year-round climate makes Bengaluru a desirable place to own a property, especially for those residing in countries with harsh winters or scorching summers.

2. Cosmopolitan Culture: The city boasts a diverse and welcoming atmosphere, perfect for those seeking a global feel. NRIs can easily find communities that cater to their cultural and linguistic preferences.

3. High Rental Yields: Bengaluru's robust IT sector and presence of educational institutions create a consistent demand for rental properties. Investors can expect healthy returns on their investment, making it an attractive option for building wealth over time.

4. Appreciating Property Values: Bengaluru's real estate market has a history of steady growth, promising good returns in the long run. This stability makes it a secure investment option compared to more volatile markets.

5. Thriving IT Hub: The city's strong IT sector translates to a robust job market and a reliable tenant pool. With a large pool of professionals migrating to Bengaluru for career opportunities, there's a constant demand for rental accommodation.

Related: Experts Reveal the Top Five Profit Tips for Investing in Bangalore Real Estate in 2024

NRIs Favor Investment Over Personal Use

Data from leading consultancies reveals a clear trend: a majority (around 65% according to Cushman & Wakefield) of NRI property purchases in Bengaluru are for investment purposes. This highlights their focus on generating rental income or capital appreciation rather than immediate personal use. NRIs often view Bengaluru real estate as a hedge against inflation and a way to diversify their investment portfolios.

NRIs Diversifying Beyond Apartments

While apartments remain the preferred choice, NRIs are increasingly exploring senior living communities and plots, indicating a growing diversification in their investment strategies. Senior living communities cater to the needs of aging NRIs who might want to return to India in their later years. Plots, on the other hand, offer the potential for future development or construction of a customized dream home.

Where NRIs are Investing in Bengaluru

NRIs seem to have specific preferences when it comes to localities within Bengaluru. Here are some of the most sought-after areas, each offering distinct advantages:

East Bengaluru: Whitefield and Sarjapur Road offer good connectivity to major IT hubs like Electronic City and Outer Ring Road (ORR), making them ideal for professionals working in these areas. Property prices here range from ₹9,000 to ₹12,000 per square foot, providing a good balance between affordability and appreciation potential.

North Bengaluru: Thanisandra provides a blend of affordability and connectivity, with easy access to Hebbal IT corridor and major arterial roads. This area is suitable for budget-conscious investors looking for promising rental yields.

South Bengaluru: Kanakapura Road offers a quieter environment with a slower pace of life compared to the bustling IT hubs. This area is attractive to NRIs seeking a more serene residential setting, with relatively lower property prices compared to other areas.

Near the Airport: Hebbal and Devanahalli are popular choices due to their proximity to the Bengaluru International Airport, making them ideal for frequent flyers or those with business interests abroad. The presence of reputed developers in these areas ensures quality construction and amenities.

NRIs Favor Affordable and Mid-Segment Homes

Contrary to expectations, NRIs aren't solely interested in luxury properties. Data suggests a strong preference for affordable and mid-segment homes (under ₹1 crore) by a significant portion (around 69% according to SquareYards.com) of NRI buyers. This segment caters to the needs of a diverse range of NRI investors:

1. Clerical and Administrative Professionals: These NRIs often invest in 2 BHK or compact 3 BHK units for rental income or future use upon returning to India. The affordability of these units makes them a viable option for building a real estate portfolio back home.

2. Tech Professionals: The mid-segment attracts tech workers who typically prefer spacious 3 BHK apartments. These properties offer a comfortable living space for young families or working professionals who might share accommodation.

3. High Net-Worth Individuals (HNIs): While the luxury segment does attract a certain portion of NRIs, their preference leans more towards villas or premium apartments in established localities. These properties offer a high standard of living and exclusivity.

Beyond Bengaluru: NRI Interest Spreads Across India

The trend of NRI investment in Indian real estate isn't limited to Bengaluru. Cities like Gurugram are also witnessing a surge in NRI interest. DLF, a leading developer in Gurugram, reported that NRIs contributed significantly to their sales, with a specific project attracting 25% of its sales from NRI markets. This indicates a broader national trend of NRIs seeking investment opportunities across India.

Conclusion

Bengaluru's real estate market offers a compelling proposition for NRIs seeking a combination of affordability, rental income potential, and long-term capital appreciation. While infrastructure challenges exist, government initiatives and a focus on development suggest a promising future for the city. With its diverse range of investment options and established IT sector, Bengaluru is likely to remain a top choice for NRI investors for years to come.

Additional Tips for NRI Investors

Partner with a Reputable Realtor: Having a reliable and experienced real estate agent can help navigate the complexities of the Indian property market, especially for NRIs who might not be familiar with local regulations and procedures.

Conduct Thorough Due Diligence: Before finalizing any property purchase, conduct thorough research on the developer, the property's legal status, and the surrounding area. Ensure the property has clear title deeds and is free from any encumbrances.

Consider Property Management Services: Property management companies can handle tenant screening, rent collection, and property maintenance, offering peace of mind for NRI investors residing overseas.

By following these tips and staying informed about market trends, NRI investors can make sound investment decisions and leverage the numerous benefits of owning property in Bengaluru, the vibrant capital of Karnataka.

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Source: hindustantimes.com