Delhi govt housing scheme sparks NRI interest

Since the Delhi Development Authority (DDA) announced a few days earlier of a new housing scheme this year, the phones at its offices have not stopped ringing. The calls are mostly from Indians based in America and South Africa, making enquiries about the new opportunity.

This interest is in contrast to the overall scenario in the real estate market, where experts say interest from non-resident Indians (NRIs) is on the wane, with negative sentiment in the market.

Also, the global property market has revived, especially in the US and some parts of Europe. DDA is yet to say how many flats would be on offer but initial estimates suggest 1,000-3,000 across Delhi, mainly in the areas of Rohini, Narela and Dwarka, according to one of its officials.

REALTY RUMBLE

The DDA is planning to construct 1,000-3,000 flats in three areas

• Previous DDA scheme was in 2010 and had 15,000 flats
• Prices of DDA flats are 25-30% less than those in private market
• NRI interest dipping in realty market because of negative sentiment and picking up of market in the US & parts of Europe

"There is huge interest among NRIs for buying DDA flats because of location, quality and price compared to other private developers," the official added.

The scheme is likely to be out in February. The previous one by DDA was announced in 2010; a little over 15,000 flats were put for sale, with winners chosen through a draw of lots. NRI interest in Indian realty has dipped, though around September-October last year, when there was a fall in the rupee, some activity was generated, says Ashutosh Limaye, head of research, Jones Lang LaSalle India.

"NRIs are getting more options outside. Coupled with the property market in the US and Europe picking up, there is less of NRI activity in the realty market here," he adds. Government housing schemes always generate a lot of interest. Compared to the private market, such houses are priced lower and there is more security attached, he explained.

Sanjay Sharma, managing director of Qubrex, a realty consultant, had similar views. "Negative sentiments are prevailing in the Indian real estate market; there is no attraction for NRIs. More, with a revival in the global property market in the US and parts of Europe, many Indians staying abroad prefer to buy there rather than coming and investing in India. Interest rates are low there and one can balance out EMIs (monthly instalment payments) through rental incomes, unlike in India."