Though a depreciating rupee has its fall out on all other economic activity, it is rather helping the Indian property market. The non-resident Indians (NRIs) who were keeping a distance from the realty market are suddenly back in the hunt. They wish to cash in on the rupee depreciation and are making a beeline to buy property in India.
Developers maintain there has been a 25 to 30 per cent spurt in sales to NRIs over the last two months. Since August, the Indian currency has fallen by around 20 per cent against the US dollar. According to real estate companies, brokers, analysts and consultants, this has triggered a substantial rise in the volume of property-related enquiries from NRIs. The actual deal numbers have also gone up considerably. Many NRI buyers are even buying multiple units for investment purposes.
Since NRIs earn in foreign currency, their buying capacity has gone up manifold with the rupee weakening against the dollar.
Facts speak for themselves. In a three-day property show in Dubai last weekend, Indian builders were able to generate bookings for homes valued at over $50 million (around Rs.250 crore), which has prompted them to hop to other cities with large Indian population like London, New York and Singapore.
The benefits of the rupee depreciation, if added to the discounts being offered by developers, makes new homes in India cheaper by almost 30% in dollar terms. At the Dubai show, 70 companies including Unitech, Hiranandani Group, Vatika, Nirmal Lifestyle, Ansal Housing and IREO showcased their 200 projects from Mumbai, Pune, Gurgaon and Ahmedabad.
The Maharashtra Chamber of Housing Industry (MCHI), the representative body of developers from Mumbai and the Mumbai Metropolitan Region, is planning to organize a property exhibition in Dubai between January 12-14. And developers, who are witnessing fall in sales volume from local homebuyers, are hopeful of a strong rebound from there.
The MCHI exhibition in Dubai will showcase around 300 properties developed by around 35 developers. “Prospects of sales to NRIs are bright this year, and therefore we are going to Dubai, London, Singapore, Doha and Hong Kong,” said Zubin Mehta, CEO at MCHI. He expects the Dubai show to generate 15-20% higher bookings than last year’s exhibition that saw bookings around Rs 70 crore and housing finance companies business at Rs.107 crore.
Sunil Dahiya, managing director of Vigneshwara Developers and Senior Vice-President of real estate association National Real Estate Development Council (NAREDCO), says some of his company’s existing NRI customers were wanting to invest more in property. Vigneshwara has already recorded a 25 per cent increase in sales to NRIs over the last two to three months. “Most buyers who were planning to buy two-bedroom apartments earlier are now switching to three-or four-bedroom apartments,” he says.
Lalit Jain, chairman and managing director of Kumar Builders and the chairman of another real estate association, the Confederation of Real Estate Developers’ Associations of India (CREDAI), agreed that NRIs were making the best of the opportunity. According to CREDAI, there has been a 30 per cent rise in enquiries from NRIs and 20 per cent increase in actual buying.
A top representative of the Global Organisation of People of Indian Origin confirmed the trend of NRIs putting their money in the Indian property market more at this point due to the rupee dip. “There’s no better time than this to invest in Indian real estate,” he said. NRIs took quick decisions on buying residential property, he added, explaining how they reacted so quickly to the rupee-dollar development.
