Fluctuating rupee, regulations making realty lucrative for NRIs: Experts

About 7-8% of the inventory is being bought and held by NRIs each year

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 told PTI here.

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 210-300 billion 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.

Property portal Zvesta.com's founder Rajat Dang seconded that, saying fall in the rupee will definitely boost the demand of properties in India and NRIs are willing to invest in realty market especially in the metro cities to get good returns.

"Online property aggregators are also getting much benefit through this with their increase in traffic numbers from day to day. NRIs are easily searching for the best properties in India with having a golden opportunity to buy it at an affordable price," he added.

Omkar Realtors, which is marketing its recently launched integrated realty project 'Sereno OID' in Andheri in the suburban Mumbai in both domestic and global markets, has received almost 100 bookings from NRIs, which is 20 per cent of total inventory, averaging a total cost of Rs 1.25 billion, into its project.

"For NRIs, depreciating Indian rupee seems encouraging to further invest back home in a property due to lesser dependence on finance and lesser outgo of EMI," Omkar Realtors director Devang Verma said.

"We see investment interest bouncing back as expat Indians are not only keen on purchasing a home in their homeland, but have also shown an increased interest in purchasing purely for investment purposes," he said.