BANGALORE: The availability of many investment options, favourable exchange rate, better pricing, flexible repayment options and professional property management services are all nudging NRI techies in the US, Bay area to look at Bangalore as an ideal destination to invest in.
A significant development in US is that second and third generation persons of Indian origin (PIO) are also looking at investing in real estate unlike in the past, a clear trend indicating that India is poised for a major turnaround in economic development in the coming years. Yet another significant factor is apart from IT professionals, those in the service industry and businessmen in the US too are evincing keen interest in investing in Bangalore.
What makes Bangalore tick among US-based NRIs?
The city has the largest concentration of IT and ITeS companies. It has been estimated that over 664 MNCs, 2,116 IT companies, 248 BPOs and 183 biotechnology companies have a presence in the city. Bangalore currently employs over 8.50 lakh IT and ITeS employees. Along with Mumbai and New Delhi, the city offers one of the highest cost-to-company salaries for IT/ITeS professionals in comparison with other cities in India. The presence of a large number of IT/ITeS companies in the city ensures availability of many job options.
According to realtors in the Bay area, NRIs returning to India and end-users are now driving the Bangalore property market. The February sales across the Bay area were up for Bangalore. This has pushed sentiments up among the local realtors on the overall market perception. Increase in the number of property shows in the Bay area is an indication of the growing level of interest among Bangalore-based developers to tap the US market.
Most of the demand for housing is driven by techies on a H1B visa. Investments in apartments in the price range of Rs 75 lakhs to Rs 1 crore are common. Some demand for villas in the price range of Rs 3 crores and above is visible too. The demand for high-end homes is driven mainly by PIOs who have spent one or two decades across the US and who want to relocate to India later.
With the depreciation in the rupee reaching a dizzying high at 27 percent in the past, sales have improved since August last year and some demand shifted from mid-segment housing to luxury housing now. This is in spite of the fact that a few developers have hiked the prices in the interim.
There is another factor for the sudden spurt in demand for Bangalore. “Internet and email have made it easier to research on projects, so many NRIs are realising that they do not need to be physically present in India to invest in property. In fact, many of our clients have conducted the entire transaction without ever leaving the US”, says Pavitra Shankar, Director, Legion Real Estate in Menlo Park, California.
Though the US-based NRIs can get personal loans at competitive lending rates, they still opt for home loans from housing finance companies and banks in India to fund the house. Many prefer to prepay the loan.