Realtors expect more investment from expats on rupee fall
The Indian rupee's sharp dip against the US dollar is tempting NRIs to invest more in the real estate sector in the country. Realtors are expecting a 35% increase in enquiries from expatriates this year, says a study by the Associated Chamber of Commerce and Industry of India ( ASSOCHAM).
The study ranked Bangalore as the most favoured destination based on early enquiries, followed by Chennai, Mumbai, Ahmedabad and Dehradun in that order. The demand appears dull in the Delhi-NCR belt.
The NRI traffic is primarily from the UAE other Gulf countries, the US, Singapore, Australia, UK, Canada and South Africa. A lot of Punjabis settled in Canada and the UK are expected to invest in Chandigarh, Mohali and Panchkula, the report said. The random survey of nearly 1,250 real estate developers across the country.
"With the rupee riding low against the dollar, Indian residents are looking to accelerate investment plans back home," ASSOCHAM's secretary general D S Rawat said. "The decline in rupee has increased property sales because people want to get value for their money. As on date, NRIs buying in India can save 20% to 30% on property value."
Real estate body CREDAI too concurred with the study findings. Confederation of Real Estate Developers' Association of India (CREDAI) chairman Lalit Kumar Jain said, "In a feedback taken from CREDAI members, we have found that already there is 30% to 40% increase in enquiries from the NRI community. People are waiting to see to how far rupee will fall. Since financial experts are projecting that rupee will stabilize in the long run, NRIs who invest now will can cash in on a weak rupee and also expect good real estate appreciation".
NRI investments in the country varies from city to city, said Jain. Going by past sales, NRIs account for 40% of apartment sales in Kochi and 15% to 20% in Bangalore. In other Indian cities they are in the region of 5% to 10%, said Jain.
Demand is more for high-end residential properties and commercial buildings. The enquiries may increase further if rupee continues to slide, feel many developers. Sluggish domestic real estate market is yet another delight for the NRI community who may get into bargain hunting.
As per rough estimates, about five million Indian expatriates, who live in six Gulf Cooperation Council countries - Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and UAE - remit close to $ 30 billion to their India bank accounts every year.
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