Depreciating rupee attracts NRIs to invest in Chennai properties

Chennai:

The depreciating rupee may be a cause of worry for policy makers but it has proved to be an opportunity for non-resident Indians who find Chennai as one of the most favoured destination for property investment.

A survey conducted by Associated Chamber of Commerce and Industry of India lists Chennai as the second most favoured property investment destination for NRIs due to the falling rupee.

Currently, the rupee has fallen by about 34 per cent against the US dollar since August 2011 and crossed 65 against the dollar.

The survey highlighted that Bangalore is the most favourite property investment destination for NRIs followed by Chennai, Mumbai, Ahmedabad and Dehradun.

M Raghunathan, state secretary Builders Association of India, Tamil Nadu says that Chennai offers good investment platform for NRIs as the price movement here is constant when compared cities like Bangalore and Hyderabad. He said the growth in Chennai has attracted developers from New Delhi and Mumbai to invest in Chennai.

Interestingly, the Assocham survey of nearly 1250 real estate developers in Chennai, Delhi-NCR, Dera Basi, Mohali near Chandigarh, Mumbai, Kolkata, Bangalore, Hyderabad, Ahemdabad, Pune and Dehradun states that the Rupee's sharp dip against the US dollar has tempted non-resident Indians (NRI) to buy property. The study further states that realtors are expecting an increase of 35 per cent in business enquiries from the expatriates this year.

Interestingly, developers like ETA Star are looking to tap the NRI market with their latest luxury project launched in Chennai. S Yashoda, general manager sales and marketing, ETA Star Property Developers states that they haven’t received drastic number of queries from NRIs regarding their projects. “By the end of this month, we will be launching massive advertising campaigns to reach out to NRIs,” she says.

The enquiries from NRIs especially from the Middle-East, Europe, the US and Singapore for buying property in India have also risen by 20-25 per cent following the rupee's depreciation, says Assocham survey. The majority of real estate developer said the NRI traffic is coming primarily from the UAE or Gulf region, US, Singapore, Australia, UK, Canada, South-Africa etc. The demand is more for high-end properties and commercial buildings.

While it is not good news for people back at home, but for a non-resident Indian (NRI), this is definitely the best time to invest. At the moment any non-resident Indian buying a property in India can save around 20-30 per cent on his or her property value, states the survey.

N Ganesh Vasudevan, CEO of IndiaProperty.com said that with the falling rupee, realty market across the country has seen a revival in interest from the NRIs.

The direct correlation between the rupee value and purchasing power has enhanced their buying capacity by 20-25 per cent. If a buyer was looking for a property valued Rs one crore, now by spending the same amount he can increase his budget to Rs 1.3 Cr or reduce the loan component.

“This has increased the curiosity amongst NRIs which has lead to an increase in the number of enquiries and site visits. It’s also to be seen in the light of Chennai been one of the top performers in Real Estate market in past 8-9 quarters,” he added.

T Chitty Babu, chairman and chief executive officer of Akshaya PVT LTD said, “Indian real estate market has turned out to be a lucrative investment option for Non Residential Indians. As a result of the downtrend in the rupee value, many of them are now actively seeking residential property investment opportunities in India. 

According to a study, most of the NRIs in the US, show interest in investing in the Chennai, Bangalore and Hyderabad real estate market. Chennai is one of the major economic centers that contributes to the country’s global rise and has always been a very good potential for real estate investment. People living in the Middle East and other Gulf countries have displayed significantly higher interest in properties in South India especially in Chennai, he said.

"Akshaya having a branch office in association with Indian Trade & Exhibition Centre in UAE acts as a single point access to quality real estate opportunity in India (Chennai) for potential buyers and property investors. Depending on the increasing monetary rewards in terms of higher returns , NRI’s will continue to invest in the Chennai market," he added.