NRIs on property hunt in Chennai and Bangalore

K Ramanathan

Thanks to the record fall of rupee value, non-resident Indians (NRIs) are flocking into real estate market with renewed vigour with Bangalore becoming their favourite hunting ground for property investment followed by Chennai and Mumbai.

According to a survey conducted by associated chamber of commerce and industry of India (ASSOCHAM) across major cities in India, developers have found an escape route from the present cash crunch and see NRIs as their saviors. 

They expect an increase of 35 per cent in business enquiries from the expat-Indians this year, reveals the survey. According to D S Rawat, Secretary General of ASSOCHAM,  since the rupee value is at one of its lowest ebbs and still not possible to predict its retreat, NRIs have found this as an opportunity to make some good investment in real estate market across India.” 

The value of rupee has gone down to about 34 per cent against US dollar since August 2011 and even crossed 65 against USD. 

The leading industry body has conducted a random study involving 1250 real estate developers in Dera Basi, Delhi-NCR, Mumbai, Mohali, Kolkata, Hyderabad, Chennai, Bangalore, Pune, Ahemdabad, Dehradun etc. Most of the developers have revealed that NRIs have been showing renewed interest especially after the rupee hit the record low since they would get good exchange rates for their currency. 

The ASSOCHAM study also found that NRIs prefer Bangalore as the most suitable city to park their funds in real estate properties, which include residential and commercial establishments. After Bangalore, NRIs prefer Chennai, Mumbai, Ahemdabad and Dehradun.

Punjabis settled in UK and Canada are showing more interest in investing in upcoming real estate spots around Chandigarh like Mohali, Dera basi, Zirakhpur and Panchukla. Surprisingly, India’s hottest real estate destinations like Delhi-NCR and Mumbai markets did not figure in their ‘most preferred’ investment destinations list. 

“The depreciation of rupee value which began six months ago has increased the enquiries from NRIs considerably and we are expecting a surge of business up to 35 per cent in this adverse market condition. The decline in rupee, though affected the domestic market due to macro-economic conditions, sales have increased due to NRIs because they want to get value for their money”, said majority of developers.

Though for non-resident Indians, this is the best time to buy properties in India, the time is not good for people back home. As per market estimate, an NRI who buys a home can save up to 30 per cent on his property value and can expect good percentage of return on investment, opines Rawat. 

With rupees continue to slide to new low levels and government finding it difficult to apply brake, experts feel that more and more NRIs will make investment in Indian property market. A new trend may also emerge, wherein developers will make homes especially for expat Indians, as most of them prefer luxury apartments and commercial property in key cities.

According to the survey majority of the NRI traffic is coming from the US, UK, UAE/Gulf region, Singapore, UK, Canada, Australia, South-Africa etc and the demand is more for commercial buildings and high-end properties. 

As per a recent estimate, nearly five million Indian expatriates are living in six Gulf Co-operation Council (GCC) countries of Oman, Saudi Arabia, Qatar, Bahrain, Kuwait and the UAE and they remit close to 30 billion USD to India every year.

The enquiries from NRIs from Europe, the US, Singapore and Middle-East for purchasing property in India have gone up to 20-25% following the rupee's depreciation, the survey further revealed.

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