Weak rupee leads to surge in NRI interest in realty
As Indian rupee plunges and dollar strengthens, it is the NonResident Indians (NRIs) who will drive the home sales rather than the Indian domestic investor. Everyone from online portals to big developers to real estate brokers are cashing in on this renewed interest of NRIs in the Indian real estate.
How much NRI investment is expected in Indian real estate by this Diwali? According to Ankit Kansal, founder 360 Realtors,a real estate consulting company, “For the entire FY 2018-19, we predict an investment of around US$ 10.2 billion in Indian property by NRI segment. By Diwali, the investments will be around US$ 9 billion.”
Dr. Niranjan Hiranandani, President (Nation), Naredco says he couldn’t agree more about the surge in global rather than local interest in Indian real estate. He cites the example of year 2012 when the rupee fell in value against the foreign currencies, and the NRI buying in Indian real estate movedupfrom 8 per cent of the total sales in metro cities to 25 per cent. He says we have a similar situation right now in 2018, and Diwali should see many NRIs buying Indian property. The traction that this enhanced buying by NRIs will bring in the real estate market will boost sentiment and have resident Indians picking up choice property options across the Indian real estate market.
However the ticket-sizes of NRI investments have been reducing, which shows that NRIs are increasingly gravitating towards more affordable and smaller units.
Says Niranjan Hiranandani, Founder & MD, Hiranandani Group, “At Hiranandani Gardens, Powai, Mumbai, which is a ‘premium postal code’, we have seen enquiries for boutique
2BHK homes in our new offering, Atlantis. As Diwali comes closer, we find serious enquiries lining up buying in the festive season. The sales team informs me that many of those prospective buyers who have been engaging with the sales team, are lining up to buy in the festive season. So, it is return of confidence in the economy plus safety and security in the new regulatory regime plus new offerings in real estate which cater to the aspirational buyer as also the discerning buyer, which should see real estate move away from lacklustre home buying this festive sea- son.”
Apart from smaller units, there continues to be a sizeable numberofNRIinvestorswhoare making purchases in the premium segment. Around 20% of the NRI investments are currently directed into high-end segments.
Do NRIs from the UK, UAE and US show different trends? The research by 360 Realtors, indicates that the ticket size of NRIinvestments by USAandUK source markets are reducing while UAE has edged up. The average ticket size of USA based NRI is 62.7 lacs (yoy change of -15.8%), while for UK based it is 71.4 lacs (-9.5%) and UAE is 89.7 lacs (yoy change of +2.5%).
Offline property fairs are passe and what is trending are online property fairs since the target audience has moved overseas to capture the NRI interest rather than just the domestic buyer. Recently Housing.com, which also owns PropTiger.com and Makaan.com, launched a month long online home shopping festival, Home Utsav from October 1, 2018 to October 31, 2018. Says Mani Rangarajan, CBO, Housing.com, said, “The festive season has always been encouraging for the real estate market. With the real estate ecosystem stabilizing in 2018 due to industry friendly policies like RERA, GST, we announce Home Utsav 2018. Keeping the buyers interest in mind, the festival will enable buyers make investment and home buying decisions, by bringing an irresistible bouquet of deals and discounts.” From premium slots for developers and featured broker slots to Digi tours and exclusive CXO interviews, being a partner in this event will enhance the developers’ visibility to users manifold. According to Dinesh Joshi, AVP Sales, Kalpataru Ltd, “We are delighted to be a part of this festival as it will generate significant home buying interest both from India andabroad. Wearethrilled to give our best offers that help home seekers find their dream homes.”
Are there pockets of interest or key micromarkets where NRIsaregravitating. Yesindeed. Research shows that the investmenthotspots this festive season include the Dwarka Expressway, Golf Course Road (Gurgaon), NoidaExpressway, Sector 15 and 16 (Noida) in Delhi NCR. In Mumbai it is Andheri, Thane, Worli, Yogeshwari, Western Express Highway, Powai (Mumbai) while in Pune it is Koregaon Park, Wagholi, Pimpri Chinchwad (Pune). Finally in Bengaluru, the areas on NRI radar are Kanakapura Road and Whitefield.
The ticketsizes of NRI Investments have been reducing