Real estate experts are indicating that the ongoing Israel-Hamas conflict has the potential to draw non-resident Indian (NRI) property investors towards the Indian market, particularly cities like Bengaluru, Pune, and Hyderabad. However, NRIs are approaching these investments cautiously due to several factors, including rising capital prices in places like Bengaluru and concerns about the upcoming general elections in India.
Some NRIs are considering shifting their investments from places like Dubai, given the instability in the West Asia region and the rising property prices in cities like Bengaluru. For instance, Salman Qureshi, a non-resident Indian based in Dubai, recently sold his property in Dubai and is now looking to invest in Bengaluru.
The conflict in West Asia has led to volatile market conditions, making Indian markets more attractive to NRI investors. Data from Knight Frank India shows that investments from Dubai into India have been on the rise, with $565 million coming in the previous year. Experts suggest that the Indian market offers better capital protection compared to the conflict-prone West Asian region and the US and European markets.
According to Ritesh Mehta, a senior director at Jones Lang LaSalle, Indian micro-markets present positive indicators for long-term investment. While rental yields in Dubai may be higher than in Bengaluru, Bengaluru offers significant capital appreciation potential.
However, it’s worth noting that even though there has been an increase in demand from NRIs in Bengaluru, the conversion rates (actual investments made) have slowed due to rising capital prices and the uncertainty surrounding the upcoming general elections.
The real estate market in Dubai continues to rise, with property prices increasing by a substantial margin in recent months. In comparison, Bengaluru remains an attractive destination for NRI investments, although NRIs are taking a more cautious approach due to market conditions and political considerations.
So, the Israel-Hamas conflict is influencing NRI investment decisions, with some NRIs looking to shift their investments from Dubai to Indian markets like Bengaluru, despite challenges posed by rising property prices and the upcoming general elections.