Realtors hope to benefit from rupee fall, NRIs to lap up projects

Rupee's freefall against the dollar could augur well for realty developers operating in the residential space, for it could spur non-resident Indians (NRIs) to take advantage of it and look at investing in residential property, according to Bangalore-based developers.

It could also mean topline growth at a time when the domestic economy is struggling and home buyers are postponing buying decision for various reasons, including rising prices of homes and borrowing costs.

VP, Marketing at Sobha Developers, Vivek Jaiswal said, “The enquiries has increased recently. Property (residential) is seen as a safe haven by NRIs. We see the bookings in this segment go up from the current level to 35 per cent,” he told reporters on the sidelines of the “Great Indian Marketing Summit-Realty Edition” organised by market advisory firm Paul Writer. NRIs accounted for about 24 per cent last fiscal for Sobha Developers.

Puravankara Projects is also gung-ho about the overseas Indian eyeing Indian residential market. The company's CEO, Jackbastian K Nazareth said, “Last year, we sold about 27 per cent residential property to NRIs and we see it happening on a bigger scale this year,” he said.

He added that the company is eyeing consolidated revenues of about Rs 1,600 crore this fiscal, up from Rs 1,248 crore last fiscal, with price per sq ft realisation to up by about 15 per cent. “In all, we plan to sell 4.5 million sq ft space this year,” Nazareth said.

The mood is upbeat at Mantri Developers as well. The director of marketing at the Rs 1,000 crore (revenues, 2012-13) company, Snehal Mantri said, “They (NRIs) will be more inclined to buy, because of falling rupee and we hope good business this fiscal.” She added that about 20 per cent of its home buyers are NRIs.

CEO-Residential Services at real estate services firm Jones Lang LaSalle India, Om Ahuja said, “Because of the rupee's downward trend, real estate has become cheaper for NRIs.” But it need not be win-win for ever for NRIs, he added.

“Developers are already experiencing the negative impact of increased costs. Since these additional costs will have to be tackled, it is to be expected that developers will begin loading them on the pricing of their projects.”