Economy

NRIs eye real estate to get bigger bang for weaker buck

V. Rishi Kumar Hyderabad | Updated on June 14, 2013

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Rupee depreciation makes this the right time to invest in realty

Rupee depreciation has been a matter of concern for most segments. But there is one section, the non-resident Indian community, which is keen to make the most of this development to make investments in the real estate.

“The rupee has depreciated nearly 18-20 per cent in the last two years. Enquiries from NRIs have gone up lately as they are keen to make the most of this situation,” Anuj Puri, Chairman and Country Head, Jones Lang Lasalle, said.

More value

Inputs from markets across the country show that NRIs are keen to invest in real estate now as they see more value for their investments.

While they gain due to the low rupee value versus, say, the dollar, property prices have still not reached the peak rates of 2008, making it more attractive to buy now, he explained.

In the past five years since the 2008 peak, prices have gone up about 18 per cent in Hyderabad, 74 per cent in Bombay, 46 per cent in Bangalore, 38 per cent in Chennai, 54 per cent in Kolkata and 43 per cent in Pune. The most preferred range of homes is in the Rs 40-60 lakh category. However, there seems to be oversupply in the luxury market in cities such as Mumbai and other metros.

During an interaction here, Puri said the regulatory environment is still a matter of concern, hampering investments.

The new Bill augurs well but certain provisions need to be tweaked. Referring to global investors, Puri said they view their investments in the long term and do not change course due to currency fluctuations.

They invest in a country like India as they get returns of up to 12 per cent, as against 8 per cent back home.

REFORMS

Alastair Hughes, Chief Executive Officer, Asia Pacific, JLL, said: “India’s ability to attract investments depends on the pace of reforms. There have been some initiatives in terms about bringing about an enactment and also a regulator, but these need to be addressed at a faster pace.”

“Investors prefer predictable outcomes. They do not like hurdles. That is when they invest. This predictability is missing in India. They are wary of investments. It is not fair to compare China and India, both are different, each with some great attributes,” Hughes said.

rishikumar.vundi@thehindu.co.in

Published on June 14, 2013

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