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Rashmi Pratap
It’s now the turn of NRIs to jump onto the affordable housing bandwagon. The average ticket size of NRI housing purchases has gone down from ₹70 lakh in FY16 to ₹51.5 lakh now as the global affinity for micro apartments percolates to India, according to data from consultant 360 Realtors.
For this fiscal so far, the average ticket size of the NRI investments is ₹51.5 lakh, easing out by almost 23 per cent compared to the previous year and 26 per cent since FY16. “In metros like Delhi-NCR, Mumbai and Bengaluru, a sizable population comprises millennials, mostly migrants. They have a high propensity for micro-apartments, studio or one BHKs due to lower rentals and ease of maintenance, which increases rental as well as resale opportunities,” Ankit Kansal, Founder and MD, 360 Realtors told BusinessLine .
Higher rental yields
Rental yields (income received from the property as a percentage of the its cost) from 1BHK segment in Bangalore is 3.50 per cent, Pune 3.60 per cent, Mumbai 3.20 per cent and Delhi-NCR 3.40 per cent. It is higher than 2BHK and 3BHK segment, both of which give less than 2.5 per cent returns. “Similar to international markets like New York, Tokyo and London, rental yields from smaller units in India are outperforming their bigger counterparts by 50 to 100 basis points, Kansal said.
Pankaj Kapoor, founder and MD of Liases Foras said the probability of finding a buyer for a smaller apartment is more than for luxury apartment. “There is supply glut in the luxury segment, where future appreciation is not in sight,” he added. The sale of luxury homes has gone down from 14 per cent of overall residential sales in FY16 to just 5 per cent now.
Capital appreciation
Backed by high demand that is constantly spiraling northwards, the potential capital returns are higher in smaller units. Farshid Cooper, Managing Director, Spenta Corporation said houses with a higher ticket size take longer liquidate, if required in future.
“Smaller ticket sizes offer good growth and more value for money in the near term, especially for NRIs, due to rupee depreciation. Additionally, in the recent past, investing in a good brand name for smaller ticket size has brought good returns on resale,” he said.
Low ticket size of smaller apartments offers lower entry barriers for young, first time NRI buyers with lower investment bandwidth. “Consequently, this defers their involvement in high ticket-size projects. As smaller units are priced moderately, young NRI buyers are actively drawn towards them,” Kansal said.
Indian developers are also coming up with studios and micro-homes with in-built furnishing. “These apartments are in sync with the expectations and preferences of international buyers. In-built furnishing are preferred by expatriates as it saves a lot of time,” he added.
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