NRIs attracted only to luxury homes is a misconception’

Gurpreet Arora owns a plush bungalow near Sainik Farms. The interiors and the architecture are an indication that he has been a prosperous businessman abroad, working as a hotelier. Arora has recently bought a 3BHK apartment in Gurgaon for Rs 80 lakh, solely for investment.

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Rs 80 lakh is nowhere close to what we would associate an NRI in Delhi NCR with. A marketing manager with a reputed developer firm in Bangalore says, “Buyers, especially NRIs, from Gurgaon spend crores in Bengaluru for a lavish holiday home and do not worry about the return on investment.” This is exactly what most of us think an NRI to be – rich, prosperous and flamboyant. However, this is just one side of the story.

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Anuj Puri, chairman and country head, Jones Lang LaSalle says, “The notion that NRIs are attracted only to luxury homes is a misconception. These investors are primarily focused on income generating assets in both commercial and residential real estate sectors.”

“In residential real estate, capital appreciation is also an objective but the larger intent in any NRI property investment is that the asset should pay off over the medium to long term. NRIs buying property for eventual personal use or for current use by the families in India look for the best deals in their cities of origin,” adds Puri.

Vidyut Jain, consultant at Om Properties and Consultants says, “The disposable income among buyers is increasing, but they are also cautious about the kind of investment they are getting into. If an NRI has some family member in the city who can look after the property, there might be some kind of willingness to buy a flashy property. For those who are driven only by entrepreneurial ambitions, a good location close to a popular job market is a good reason.”

But is there any momentum within the property market?

PropIndex (Jul-Sep 2014), a quarterly research report by Magicbricks, indicates that buyers are actively looking if not buying. While local buyers are still in the homework stage, is it safe to assume that NRIs are also actively looking today? “There has not been a slowdown in NRI interest in Delhi – or, for that matter, in any part of India. There has been a realignment of interest. NRIs are no longer swayed by developers’ flashy promotions of ‘NRI properties’,” informs Puri.

While we talk about such realignment, are there newer areas that draw attention? “Gurgaon and South Delhi have lost much of their attractiveness for the largest segment of NRI investors because of the steep prices and unfavourable appreciation statistics over the last 2-3 years. While HNI NRIs still favour these precincts for their glamour value, the new focus is on growth corridors such as Noida, Greater Noida and even newly emergent areas like Neemrana,” notes Puri.

Om Ahuja, CEO, Residential Services, Jones Lang LaSalle says, “The latest crop of luxury projects by developers who have branched out into new locations has successfully targeted this segment of buyers who are willing to think outside the confines of the narrow concept of luxury that focuses solely on the  address.”

He also believes that while proximity to the city’s CBD or elite neighborhoods is not an operative factor for such projects, accessibility to key business areas continues to be important and developers of these new luxury projects must succeed in capturing this advantage.

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