Real estate de­vel­op­ers pin hopes on a Christ­mas mir­a­cle

Business Standard - - COMPANIES - KARAN CHOUDHURY

The coun­try’s bat­tered tele­com com­pa­nies are look­ing for ways to put on a new coat of paint. And, they are pin­ning their hopes on hol­i­day­ing non­res­i­dent In­di­ans (NRIs) to see a rise in off­take. Ac­cord­ing to ex­perts, the in­dus­try ex­pects as much as 15 per cent rise in sales over the past year dur­ing this pe­riod.

“The sec­ond half of De­cem­ber is hol­i­day time in most west­ern coun­tries, in­clud­ing the US, most of Europe, UK, Aus­tralia, and

New Zealand, among oth­ers. Sev­eral com­pa­nies in these coun­tries give their employees a va­ca­tion dur­ing this pe­riod. So, it is a per­fect time for most NRIs to travel back to In­dia and in­clude prop­erty buy­ing in their In­dia sched­ule, if they’re con­sid­er­ing such a pur­chase. Trend shows such NRIs do a lot of on­line re­search, then sched­ule site vis­its of short­listed prop­er­ties and meet de­vel­op­ers or prop­erty con­sul­tants,” said Sha­jai Ja­cob, chief ex­ec­u­tive of­fi­cer – GCC (Mid­dle East) Anarock Prop­erty Con­sul­tants.

He said that while this pe­riod is usu­ally not a “high traf­fic” prop­er­ty­buy­ing sea­son in In­dia, where the pri­mary fes­ti­val times co­in­cide with Dussehra, Di­wali and Onam, NRIs’ in­tent on buy­ing a res­i­den­tial prop­erty in the coun­try are now less likely to fo­cus on aus­pi­cious el­e­ments. For them, it is more about op­por­tu­nity of ex­tended va­ca­tions to scout for prop­er­ties and seal deals be­fore head­ing back to their coun­try of res­i­dence.

Ac­cord­ing to Gau­rav Ku­mar, manag­ing direc­tor and co-head, cap­i­tal mar­kets, CBRE In­dia, Mum­bai, Del­hiNCR, Ahmed­abad, Kochi, Lud­hi­ana and Chandigarh are some cities that wit­ness gen­er­ous in­vest­ments from NRI in­vestors.

“While met­ros cities con­tinue to be pre­ferred lo­ca­tions, sev­eral tier-II towns and cities have be­come lu­cra­tive in­vest­ment des­ti­na­tions. The top seven mar­kets in­clude Delhi-NCR, Mum­bai, Ben­galuru, Hy­der­abad, Chen­nai, Pune and Kolkata. These mar­kets have recorded over­all hous­ing sales of roughly 80,000 units in the first three quar­ters of this fi­nan­cial year. These are driven by both do­mes­tic buy­ers as well as NRIs,” said Ku­mar.

Ac­cord­ing to Anarock, while in any given quar­ter NRIs largely com­prise about 7 per cent of the total sales, it may in­crease to 15 per cent dur­ing the fourth quar­ter. Anarock data on the over­all sales num­bers in the Oc­to­ber-De­cem­ber quar­ter in the past two years in­di­cate a quar­ter-on-quar­ter de­cline in both 2016 and 2017 by 47 per cent and 21 per cent, re­spec­tively.

“This de­cline can be at­trib­uted to a num­ber of rea­sons, in­clud­ing de­mon­eti­sa­tion and Real Estate (Reg­u­la­tion and Devel­op­ment) Act (RERA). While res­i­dent In­di­ans may not be in­creas­ingly ac­tive in pur­chas­ing homes dur­ing this time, NRIs would add sub­stan­tially to the over­all sales num­bers. For de­vel­op­ers, it is usu­ally a lull pe­riod for mak­ing land pur­chases and they utilise this time to pro­mote their projects among the NRIs,” Ja­cob said.

NRIs com­ing from a pure end-user per­spec­tive pre­fer to in­vest in their cities of ori­gin. How­ever, a more re­cent trend – buoyed by the favourable exchange rates and also re­booted reg­u­la­tory en­vi­ron­ment – is in­creas­ing num­ber of NRI in­vestors opt­ing for cities that will give them de­cent re­turns on in­vest­ments. A re­cent Anarock sur­vey high­lighted that to­day, nearly 61 per cent of NRIs ex­pect al­most 20 per cent re­turn on in­ter­est from prop­erty in In­dia.

While in any given quar­ter, NRIs largely com­prise about 7% of the total sales, it may in­crease to 15% dur­ing Q4, says Anarock

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