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NRI's Turning to Realty Market as Rupee Gets Cheaper
By siliconindia
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Wednesday, 21 December 2011, 00:16 IST |
1 Comments
Bangalore: The continuous depreciation in rupee over the last six months is attracting many Non-Residents Indians (NRI's) to penetrate into the realty sector in the country. The current value of rupee is 52.96 and fluctuation has been witnessed in it for quite some time now. Not only against Indian dollars but rupee is losing ground against other currencies at an equal pace.
Some NRI's consider the 20 percent deprecation in rupee like a discount of 20 percent for getting a property. Builders who were struggling over a year now to sell homes are the one to be most benefited with this. Booking values over $50 million were generated in a recent three day property show in Dubai, which boosted the builders to hop across other cities like London, New York and Singapore, with large Indian populations.
Sunil Jaiswal, Chief Executive of Sumansa Exhibitions, who organized the Dubai show, expects the NRIs contribution to the company's revenue to jump over 8 percent in the ongoing financial year, as against 3-4 percent earlier. "In three days most of the buyers have shown interest in paying the entire amount upfront to get the benefit of current currency rate. Of these, 53 percent people have booked these properties for own use while rest have bought with investment objective."
Niranjan Hiranandani, Managing Director of Hiranandani Group, was quoted as saying to the Economic Times, "International real estate investment destinations, especially Europe and the Middle East are increasingly becoming uncertain. This, along with sharp depreciation in rupee, is attracting more NRIs towards Indian property markets." Milind Korde, Managing Director of Godrej Properties said, "We have seen tremendous interest from the Gulf and European buyers in the luxury residential real estate," as quoted by Business Standard.
Though the NRI's look keen towards buying property in the country, the total sales through it will be around 5 percent, which can result in cash flows for the developers but will have no effect on the downward price pressure.
The high interest rates in India may drip down the enthusiasm of Indian buyers but it will not affect the NRI's much as the interest rates for loans are much lower in U.S., Europe and Gulf.