Weaker rupee, regulations make realty attractive for NRIs
A fluctuating rupee, and introduction of various regulations to bring in transparency and accountability, are making real estate more lucrative for non-resident Indians (NRIs), experts say. Rupee is hovering near 73 against the US dollar since the past one week.
“The drop in rupee can be seen as an investment opportunity for individual buyers as well as institutional investors. Over the past few months we have witnessed a lot of interest from NRIs. This trend continues to grow stronger due to the timely reforms introduced that brought transparency and accountability in the sector,” CBRE Chairman, India, Southeast Asia, Middle East and Africa Anshuman Magazine said.
With the real estate industry estimated at about Rs 3 trillion annually, about 7-8 per cent of the inventory is being bought and held by NRIs each year.
“This amounts to about Rs 21,000-30,000 crore 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 counter parts,” Nisus Finance Managing Director and CEO Amit Goenka said.
Given the current trend of enquiries and purchases in the last 2-3 months, it is being estimated that this consumption will rise to about 10-12 per cent.
“Hence 3-5 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 (rupee fall) is a deja-vu of sorts as it is the same as 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 primary level are down by 10-15 percent, and the currency valuation adds another 10-15 percent, it definitely is a scenario where the NRI buyer is back,” he added.