The sluggish growth rate in the developed economies across the world and the fluctuation in the rupee-dollar price can become an opportunity for NRIs to invest in the city. “There couldn’t be a better time for high net worth individuals (HNIs) to invest here,” says Ganesh Vasudevan, Vice President and Business Head, Indiaproperty. “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,” he adds.
The city continues to be a favourite investment destination for those living abroad. According to Avinash Rao, Regional Director – South, Knight Frank India Pvt Ltd, “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.” He further explains that over the years, Bangalore has emerged as the destination of choice for NRIs. There could be a number of reasons why this is the case but some of the key reasons are product offerings and pricing.
There is a distinct product for almost every requirement. For example, there is an excellent mix of premium villas, affordable villas, premium apartments and row/town houses etc. Similar to the product offerings, pricing too is a key factor and Bangalore offers multiple options at multiple price points. This enables the investor/end-user to get the best value. This is not to say that property prices in the city are low or the returns on investment is poor, it is only stating that the prices are stable and returns are good.
Bangalore is well-known as the Silicon Valley of India and continues to attract both technology organisations as well as skilled professionals. More recently we have seen a number of Indians returning back from abroad to the city, elaborates Rao.
The localities more popular among this group of investors are spread in all the four directions of the city. Banashankari, Kanakapura Road, Bannerghatta Road, Hosur Road, and Sarjapur Road are popular localities in the south.
The Outer Ring Road, Marathahalli and Old Madras Road are the favourites in the east. In the north, Hebbal, Yelahanka, Thannisandra Road, Bagalur Road, and Bellary Road continue to drive demand.
“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” says Rao.
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.