Weaker rupee, regulations, make realty attractive for NRIs

A fluctuating rupee and the introduction of various regulations to bring in transparency and accountability, are making real estate more lucrative for non-resident Indians, experts say

The drop in the value of the rupee against the US dollar, can be seen as an investment opportunity for individual buyers, as well as institutional investors, according to real estate experts. “Over the past few months, we have witnessed a lot of interest from non-resident Indians (NRIs). This trend continues to grow stronger, due to the timely reforms introduced that brought transparency and accountability in the sector,” CBRE chairman, India, south-east Asia, middle-east and Africa, Anshuman Magazine, said. The rupee is hovering near 73 against the US dollar, since the past one week.

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With the real estate industry estimated at about Rs three trillion, annually, about seven to eight per cent of the inventory is being bought and held by NRIs, each year. “This amounts to about Rs 21,000-30,000 crores of annual purchases by NRIs, each year. Due to weaker rupee, a 10 per cent depreciation allows NRIs to enter at a 10 per cent discount, compared to the domestic resident counterparts,” Nisus Finance managing director and CEO, Amit Goenka said. Given the current trend of enquiries and purchases in the last two to three months, it is being estimated that this consumption will rise to about 10-12 per cent. “Hence, a three to five per cent increase in NRI consumption, of residential and commercial inventory, will further boost project sales and suck up significant unsold inventory,” Goenka added.

According to NAREDCO national president Niranjan Hiranandani, for NRIs, this situation (the fall of the rupee) is a déjà vu of sorts, as it is similar to the scenario the country witnessed in 2012. “Home buying is regaining traction. RERA has made it better and in a situation where property prices at the primary level are down by 10-15 per cent and the currency valuation adds another 10-15 per cent, it definitely is a scenario where the NRI buyer is back,” he added.

Property portal Zvesta.com’s founder Rajan RPT Rajan Dang agrees, saying that the fall in the rupee will definitely boost the demand of properties in India and NRIs are willing to invest in the realty market, especially in the metro cities, to get good returns. “Online property aggregators are also getting much benefit through this, with increase in traffic numbers. NRIs are searching for the best properties in India and have a golden opportunity to buy it at an affordable price,” he adds.

 

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