The rupee's slide to almost 60 to a dollar is of great concern, but real estate developers are likely to gain from a fresh burst of interest from NRI buyers who now have to pay less dollars. Enquiries from non-resident Indians have jumped 20% in a month, builders say.
"When the rupee was at 42-45 to a dollar, we had 30-40% demand from NRIs. Now with the rupee touching 60, the demand will be 50-60%," says SN Raghuchandran Nair, Managing Director, SI Property, a Kerala-based real estate company.
And it's not just Kerala. Developers across the country are flooded with renewed interest from abroad.
NRIs accounted for 15% of Mumbai-based Lodha group's sales in FY13, up from 7% two years earlier. "NRIs gain is in direct proportion to the depreciation of the rupee, and this is reflected in the huge interest that we've seen from our NRI customer base," says R Karthik, the firm's chief marketing officer.
Supertech, UnitechBSE 0.50 %, ATS Infrastructure and Amrapali, all based in the National Capital Region, are also seeing a jump in enquiries from NRIs, especially from the Middle-East, Europe, the US and Singapore.
"We've seen a 30-40% increase in enquiries from NRIs in the last one month," says Ajay Chandra, managing director of Unitech.
Seizing the opportunity, Bangalore-based Sobha DevelopersBSE 2.25 % is hardselling its properties to NRIs. 'Invest in homes now and save Rs 34 lakhs,' screams one promotion on its website. The promised savings are on account of rupee depreciation.
"Over three years, we have seen a 20% increase (year-on-year) in NRIs buying homes," says Jagdish Sharma, managing director of Sobha Developers. NRIs form 25% of the company's customer base.A combination of high-end condos and luxury villas are the most sought after, says Nitesh Shetty, chairman and managing director of Nitesh Estates.
Real estate firms are doing every thing to make the most of this interest. About 90 developers went to the Indian Property Show in Dubai. The three-day exhibition, which concluded recently, generated business of over Rs 600 crore, says Sunil Jaiswal, President and Chief Executive Officer at Sumansa Exhibitions in Dubai, which organised the show.
Shetty of Nitesh EstatesBSE 0.20 % is now looking forward to participate in Citibank's IndiaHome property exhibition in Dubai next month.In another unique initiative, Noida-based Amrapali Group will pitch its tents in a UK convention where 2,000 Indian doctors from all over the world will converge next month.
"This is a small boost to home sales in the country which have been sagging in recent quarters," says Lalit Kumar Jain, president of the Confederation of Real Estate Developers of India.
Besides the fresh business, developers also stand to gain from a likely inflow of much-needed cash as NRIs are keen to make payments in advance while the rupee is still weak. "We are witnessing a trend towards 100% down payment due to the current scenario," says Girish Shah, Executive Vice-President, marketing & sales, Godrej Properties.
The rupee has fallen by about 25% against the dollar over the last two years and is currently at an all-time low of Rs 59.66.
Some developers in Kerala, which has the one of the largest population of people living in the Middle-East, say they are seeing more demand from NRIs than from locals.