NRIS Express Interest in Buying Property in Mumbai

Last year, the Indian economy moved at a sluggish pace. Although the appreciation in the value of dollar may have been an issue of concern for many, construction developers certainly weren’t complaining.

According to a report by one of the country’s leading newspapers, since the time the rupee depreciated by 12% against the dollar; Indians working abroad have been expressing a keen interest in buying a property in Mumbai.

The falling rupee has made it possible for an average NRI to invest in some of the metropolitan’s premium locations. A flat that could be bought for $1million in May 2013, cost almost $900,000 in July 2013. Although the savings are significant, the realty trend is more inclined towards properties ranging between Rs.1-3 crores rather than luxury homes.

Growth in Interest of NRI Investors

The NRI community ranks amongst the top five investors in the country, forming nearly 15% of the city’s residential investors. Of the total annual apartment sales of Rs.50, 000 crores, NRI investors contribute approximately Rs.8, 000 crores. Mumbai continues to be the favourite of the community as the city’s real estate provides investor-friendly options.

This in turn has led to a sharp increase in foreign investors. Other factors that have contributed to this increase include higher economic growth, constant globalization, infrastructural development, positive demographics, rise in income levels, increase in demand for social infrastructure and proximity to commercial workspaces. A vast majority of this population are interested in investing in housing options that will generate immediate rental income as well as appreciate in the near future.

Popular Areas for Investment

Although almost all the localities in and around the financial capital of the nation has ample scope of appreciation, there are three areas in particular that NRIs prefer. These include properties in Thane, Kandivali East-Mumbai and Kharghar-Navi Mumbai.

In the last three years, the Ghodbunder road area in Thane has witnessed a 55% appreciation in the capital values while rental income has escalated by 33%. Owing to Kandivali East’s proximity to the Western Express highway, the capital value of flats has surged by 42% and the rental values have shot up by 25% during the same time period. The third favourite residential destination, Kharghar has registered an increase of 37% in the value of its capital and 23% rise in the rental values in the same year.

While a 1BHK unit costing between Rs. 45-60 lakhs in Thane would generate a monthly income of Rs. 8,000-12,000; the same would cost around Rs. 35-90 lakhs in Kandivali East and its lease value would be approximately Rs. 8,500-20,000. In Kharghar, a 1 BHK flat can be bought for Rs. 35-55 lakhs and would accrue a rent of Rs. 6,500-10,000.

Mumbai is the most popular choice of Indian investors from US and UAE alike, while Bangalore ranks as the second. Pune and Chennai together hold the third position; followed closely by Delhi, Cochin, Gurgaon and Hyderabad. Majority of them prefer residential apartments as compared to villas or commercial properties.