Dubai, Dec 17 (Emirates 24 x 7): A weakening rupee against the dollar/dirham has not yet translated into non-resident Indians (NRIs) buying properties back home, the activity is likely to increase in the coming six months, according to Jones Lang LaSalle India.
“The weakening will certainly result in more investments into real estate. However, NRIs will wait for a while longer for further depreciation of the rupee, so that they reach what they perceive as the right price points. We would conceivably see increased activity in around six months' time,” Himadri Mayank, Senior Manager - Research and Real Estate Intelligence Service, Jones Lang LaSalle India, told Emirates 24/7.
Asked if NRIs, especially from the GCC countries, are buying properties, he said: “No, so far we have not seen any major increase that would be significant in market terms. However, the coming year will definitely see an upscale in demand.”
Meanwhile, developers at the India Property Show, which is showcasing 300 projects worth $5 billion, believe the time is right for NRIs to buy property with the depreciating rupee giving them a 15 to 20 per cent “instant” saving.
“We do believe that this is a right time for NRIs to buy properties as they get it cheaper by 15 to 20 per cent. We have closed a number of transactions in the past few months… the number will swell in coming months,” Prashant Mirkar, General Manager - Marketing, House of Hiranandani, told this website.
Mauresh Shethi, a financial analyst with a Dubai-based bank, said: “I am looking to buy a property back in hometown Delhi. Unfortunately, I can’t pay the full amount in cash to buy my property… hence, I can’t avail of that 20 per cent discount. Besides, interest rates are high at the moment. I would wait rather than buy now.”
The dollar-backed UAE dirham rose on Thursday to an all-time high against the rupee (Dh 1 = Rs14.77). The rupee has deteriorated by over 21 per cent since the beginning of 2011 and is the worst performing major Asian currency this year.
JLL’s Mayank advises people to thread cautiously if they are looking to buy in Tier 1 cities since there is a lot of flux there at the moment.
“Tier 2 cities are a safer bet for here-and-now investments. Those hoping to invest in luxury and super luxury units should wait for at six months longer. Investing in commercial property in tier 1 cities is safe because the market is now at its cyclical low.”
Some markets with high supply and wilting demand will slow down, while cities such as Bangalore, Pune, Chennai look favorable, he added.