Demand dips but Bangalore retains top slot for investment in housing by NRIs

There has been a dip in the quantum of investment in real estate by US NRIs but Bangalore continues to remain as the favoured destination for realty investment in bay area, reports V Nagarajan from Santa Clara  SANTA CLARA: The impact of economic slowdown has been increasingly felt on the overall demand pattern among US NRIs while investing in real estate back home. However, Bangalore continues to remain the favoured destination for investment in housing. But the quantum of demand has dipped over the years. An estimated 45 per cent of the US NRIs wish to seek home loans while investing in residential property across the country. In a survey conducted during the 2-day property show organised by Priya Publications and REBI and held in Edison and Santa Clara during November 12-20 , southern cities drew more demand for investment in real estate. In bay area alone, Bangalore continues to remain as the favoured destination for techies as chances of re-employment are better in the city for returning NRIs. Whereas in Edison area, Chennai topped the list of cities for realty investment. Other cities that evinced keen interest among NRIs include Ahmedabad, Pune, Delhi, Gurgaon , Mumbai, Hyderabad and Kochi. Among tier III cities that are driving demand specific mention must be made about Mysore, Mangalore, Vishakhapattinam and Coimbatore in south. Incidentally the level of interest for investment in Ahmedabad is up especially with the state receiving more foreign investment for infrastructure projects leading to better yield for investors. Unlike earlier, demand for villas has surged with a significant number of visitors evincing keen interest to invest in villa projects in southern cities. Other categories of properties for which demand continues include office space, developed plot and retail units. A majority of the US NRIs are looking for professionally managed property management companies to manage their properties during their absence in India. The setting up of shops by MNCs like L J Hooker, Red Sky and Remax has encouraged them to look at additional investment in real estate. The availability of guaranteed rental income properties has generated much interest due to minimal financial outgo and the flexibility to offset EMI payment against rental income every month. As developers are keen to manage such properties for the initial years, NRIs evinced keen interest to invest in such properties. According to market sources, the overall situation is yet to improve though a majority of the techies are able to hold on to the jobs as there continues to be a demand for skilled jobs across US. However, those companies which are depending on the federal government for a chunk of its business are finding the going tough. For instance Cisco has laid off 10% of its employees all over the world because 20% of the revenue comes from the federal government spending. Industry sources point out that 3-5 % of employees getting laid off is common in every company. Asset prices collapsed and three-fifths of households in the US saw their wealth decline between 2007 and 2009. More than a quarter lost over half of their wealth. America's average annual unemployment rate zoomed upwards too when it went from 5.8% in 2008 to 9.3% in 2009 and 9.6% in 2010.

source: http://economictimes.indiatimes.com/markets/real-estate/news-/demand-dips-but-bangalore-retains-top-slot-for-investment-in-housing-by-nris/articleshow/11105118.cms