NRI INTEREST IN REALTY WANING
CHANDIGARH:The presence of the non-resident Indians (NRIs) as buyers in Punjab’s realty sector is decreasing, but industry factors are only partially to blame. “There’s a widening trust deficit between the sons of the soil, who moved to foreign lands to earn a living, and their ancestral land,” says Nitin Singh, 52, a businessman based in San Francisco, US.
In the past decade — more so in the past six years — “We are witnessing the NRI investor turning into a net seller from a net buyer. In previous years, the festival season, which generally starts in October and extends up to December, was a time when one could find a large number of NRIs visiting and investing heavily in properties,” says Deepak Badyal, 48, president, Ludhiana Realtors Association.
“Now, if NRI investors come to the state during the festival season to visit relatives or pay obeisance at a holy place, they generally try to sell property,” he adds.
The realty market in Doaba region — more specifically the Jalandhar area — depends heavily on NRI investors. “Earlier, Jalandhar could buck the general slowdown because of NRI presence,” says Anil Chopra, 64, a Jalandhar-based builder and chairman of the state chapter of Confederation of Real Estate Developers’ Associations of India (CREDAI).
LEGAL MESS
NRIs have become wary of investing in local property fearing its getting grabbed by relatives or others, say observers. Sunny Singh Virk, 56, settled in Placentia, US, says, “The fear of losing property to a relative’s greed and then suffering harassment at the hands of local officials has taken root among the NRI investors.”
Figures from the state commission for NRIs also highlight the gravity of the problem. “Around 60% of the cases in the commission are related to property matters,” informs Rakesh Kumar Garg, its chairman. Even though returns from realty assets diminished in the past few years, “the number of such cases hasn’t decreased,” he adds.
Information from the office of inspector general of police, NRI wing, says 221 property disputes have been submitted with it since 2013. The number of cases in 2015 was 31, increased to 44 in 2016, and this year 20 cases have come till this month. “However, most cases don’t even reach the police, and the NRI gets bogged down with revenue officials,” says Virk, who is originally from Amritsar. “One of my friends in the US was visiting his ancestral village, and discovered that his relative had grabbed his property. Initially, he planned a visit for only 10 days, but ended up staying for more than six months. In addition to apathetic local authorities, he faced false allegations dissuading him from registering a police complaint against the culprits. That’s the experience shared by many NRI investors,” he adds.
NRIs have also found it difficult to get justice against defaulting builders. Those contacted by HT are not positive about effectiveness of the recently implemented Real Estate (Regulation and Development) Act in protecting their interests. “There are so many laws in India for protecting our interests. But the implementation is either faulty or the officials are half-hearted in their effort to effectively implement these. So, a new law or set-up isn’t expected to make a difference unless the attitude changes,” says Nitin Singh.
DECLINING RETURNS
Price corrections and low demand form the norm in the state’s realty market. For instance, in Ludhiana, according to the National Housing Bank (NHB) RESIDEX Housing Price Index (HPI), prices declined by 8% between December 2016 and March this year. The cumulative decline over the last five years is much higher.
Nitin Singh shared, “I bought a flat on GT Road in Ludhiana around a decade ago for Rs 70 lakh. Now, I am not able to sell it off even at half that rate.” Virk shares a similar experience, “I am trying to sell my property in Amritsar for the last four years. At the same time, property returns in the US have improved in the last few years.”
GENERATIONAL DISCONNECT TOO
Attachment to their ancestral village or town also brings NRI investor to buy property in the state. But, this emotional glue is losing its affect on newer generations. “Twenty years ago I left Ludhiana for US. I am a proud Punjabi and very attached to my birthplace. But, my children born and brought up in the US don’t share my emotions for Punjab. And, consequently, my keenness to have a house in Punjab has also diminished. If we buy property in our home town, who will take care of it?” says Rakesh Rai, 57, from Dublin, US.
Also, NRIs who visit for religious reasons or for meeting relatives are also opting for a hotel. “Maintaining a house in absentia is a big headache,” says Rai.
The interest can revive “if the system becomes more empathetic to NRIs’ concerns”, says Nitin Singh. “We know the market cycle can see an upturn in the near future, and our children can be encouraged to be passionate about the state. But, unless NRIs feel safe in investing in the state without the fear of harassment or bureaucratic apathy, the will not.”
We know the market can see an upturn and our children can be turned passionate about the state. But, unless NRIs feel safe against harassment or bureaucratic apathy, they will not invest. NITIN SINGH, businessman based in San Francisco, US