The favourable exchange rate and the US Federal Reserve’s attempts to tackle a rapidly-weakening economy by freezing short term interest rates for two years are two factors that encourage NRIs across the US to divert their investments into more profitable avenues such as property here. According to Chandru Bhambhra, a realtor based in the US in the bay area, in addition to the exchange and interest rates, the need to have a property in India as well as the high appreciation in value influence an increasing number of NRIs to invest in real estate here.
As of now, IT professionals form a major segment of the buyers. Those who are keen on relocating look at cities such as Bangalore as the chances of a job in the IT sector appears better. Whether it is a temporary assignment or a permanent shift in their own organisation, a number of NRIs feel owning a home away from home is a viable proposition both in terms of price appreciation and rental returns. There are two types of prospective NRI property buyers. One is the first-time buyer who is invariably a recent immigrant with a definite period of stay in the US. The second is the investor who is invariably an established professional or successful entrepreneur who has made his fortune during his sojourn abroad.
“The first-time buyers prefer their hometown. Many choose Bangalore for its top class housing and amenities where prices are dictated by market dynamics. A large number look for options in the range of Rs 50 lakhs to Rs 75 lakhs, says Khanderao, Founder, Global Indian Technology Professionals Association, in the bay area in California. There are some looking for a smaller investment. The over-riding priority here is a site. This is mainly a hedge against inflation. MNCs planning to expand their existing operations are looking at commercial spaces. “In addition to the existing MNCs, I expect new companies in the social and cloud computing space to look for expansions in Bangalore,” says Khanderao. MNCs are drawn to Bangalore due to its large talent pool tuned to the same professional culture as in the US.
“Around 70 per cent of the NRIs seek a home loan from the housing finance companies and banks in the US to fund their home purchase in India. This is because they require a longer repayment period and at the same time are keen on closing the loan much earlier than the scheduled period. The intention is to have minimal cash outflow every year in the initial years,” says N Raghavendran, President, Bharathi Tamil Sangham, California.
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