[ecis2016.org] While job magnets like Mumbai or Bengaluru, may be the preferred cities for an average salaried-class individual looking to buy a house, for a large share of expat Indians who wish to invest in real estate in the country, it is the hometown that ranks above other investment destinations
in the aftermath of the COVID-19 pandemic, the mindset and the outlook of non-resident Indians (NRIs) vis-à-vis the Indian property market has changed drastically. While earlier more NRIs were buying properties, now active professionals are scouting for properties. Naturally, these professionals are not glued to their hometowns for a comfortable retirement and hence, the choices and concerns have also changed.
You are reading: NRIs prefer to invest in hometown over major metros
Many of these NRIs have future job uncertainties in foreign locations. Consequently, they are now willing to invest in the top-tier cities for future business and job opportunities. The peripheral locations of the top-tier cities are, hence, far greater in demand today. Some of the most sought-after regions are Bangalore, the MMR, Pune, Ahmedabad and NCR regions like Ghaziabad and Faridabad.
The focus of the young NRIs is on cheaper valuation of properties in the peripheral locations and bigger houses with amenities. Even some of the tier-2 cities that have connectivity with the upcoming industrial corridors like the Delhi-Mumbai Industrial Corridor or Bengaluru Mumbai Economic Corridor, are witnessing traction from NRIs.
More than three-fourths (78%) of non-resident Indians (NRIs), who are looking to invest in real estate in the country, wish to do so in their hometown. Among the NRIs who are investing for the purpose of long-term capital appreciation, this percentage goes up. Around 82% of NRIs maintain that they would in any case invest in their hometown, even when they are advised about opportunities in other cities, as it gives them a sense of security.
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NRIs who are planning to come back and settle in India, also prefer to invest in their hometown only. No less than 70% of them are even ready to take up a relatively lesser paying job in their hometown, than go for a job with higher salary in the metropolitan cities. These NRIs maintain that quality of life is more important, as against the high cost of living and stressed life in cities. The third set of NRI buyers – retiring professionals – are the most home sick. As many as 90% of them would definitely buy a house in the hometown only. These buyers say that they would not risk living a lonely life among strangers.
These were the findings of a first-of-its-kind comprehensive global online and offline survey by real estate think-tank group Track2Realty and its global alliance partners. NRIs from the US, UK, Middle-East, South Africa, Canada, Australia, New Zealand, Malaysia, Singapore and Mauritius, participated in the survey. They were given a mix of open-ended and close-ended questions, to assess their investment choices in the Indian property market.
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Top cities where NRIs prefer to buy properties
The top cities for NRIs, in order of preference, are: Kochi, Coimbatore, Bengaluru, Chennai, Ahmedabad, Hyderabad, Thiruvananthapuram, Chandigarh, Pune and Mumbai.
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Chaitanya Verghese, an NRI from Kerala, is keen on investing in a property in Kochi. If money and return on investment (ROI) are the only criteria, then, he says that he would prefer to continue working in Manhattan and not come back to India. His main reason for returning to India, is the desire to settle back at home, with friends and relatives. “However, once I pack my bags for India, I do not want to live with a feeling of an immigrant in my own country. People tell me about fantastic real estate opportunities in other places but I am not an investor. My investment is for self-use and it is self-funded. I want to enjoy life now, after having worked overseas for nearly two decades,” says Verghese.
Rashesh Shah, an NRI from Ahmedabad, was advised to invest in a property in Mumbai and also set up his business over there. He, however, is not convinced. “The cost of a luxury apartment in Ahmedabad, is a fraction of what a premium apartment in Mumbai would cost. The cost of doing business per sq ft in Ahmedabad, is also very less. Considering the comfort and lifestyle that my hometown can offer, added with the lesser uncertainties and lower investment for business, Ahmedabad is an ideal city for me. Moreover, this city is poised to grow faster than any other city,” reasons Shah.
Factors that NRIs consider, while buying properties in India
The survey tried to find out whether the low ticket size of investment, makes some of the tier-2 cities score over their metro counterparts. Opinion is divided but one-third of the respondents (34%) admit that the low cost is one of the determining factors. A whopping 48% nevertheless cite quality of life and family bonding, as the major driving force behind hometown investment. The remaining 18% cite other reasons. A majority of the NRIs (58%) also felt that the metro cities are saturated in terms of price point and future appreciation potential. 64% remain convinced that tier-2 cities will be the next growth drivers – a conviction that is further goading them to invest in their hometowns.
Homesick NRIs
- 78% NRIs wish to invest in their hometown.
- 82% NRIs looking for capital appreciation would invest in their hometown, even if they are told about fantastic opportunities in some other city.
- 70% of the NRIs planning to settle in India, are ready to take up a relatively lesser paying job in their hometown, instead of a high salary in metro cities.
- 90% of retiring NRIs do not want to risk living a lonely life among strangers.
- The preferred cities for NRIs are: Kochi, Coimbatore, Bengaluru, Chennai, Ahmedabad, Hyderabad, Thiruvananthapuram, Chandigarh, Pune and Mumbai.
- 34% prefer to invest in their hometown, due to lower ticket size, while 48% do so for quality of life and family bonding, while the rest 18% cite other reasons.
- 58% of NRIs feel that metro cities are saturated, in terms of price point and future appreciation potential.
- 64% NRIs are convinced that tier-2 cities will be the next growth drivers.
(The writer is CEO, Track2Realty)
Source: https://ecis2016.org/.
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Source: https://ecis2016.org
Category: Lifestyle
