NEW DELHI: Non-resident Indians invested over $2 billion in Indian real estate in 2013, riding on the back of a weak rupee and heightened promotions by developers to attract them at a time when domestic demand was weak. NRIs spent at least 35 per cent more on buying homes across the country in 2013 compared with the previous year and made for almost 12per cent of total apartment sales in the top seven cities, according to property advisory firm JLL.

This $2 billion investment does not include Punjab, Gujarat and Kerala, states where a bulk of repatriation happens. According to the World Bank, India led remittance flows globally, receiving $70 billion in 2013.

In the year gone by, everything seemed to have fallen in place for Indians living abroad and wanting to buy property in their homeland. The rupee was on a downward spiral, dropping between 15per cent and 25per cent during the year, property developers were under tremendous stress because sales were lacklustre, property prices had not moved up too much over the last 15 months and western markets were experiencing a bounce back.

“These NRIs saw the rebound in the Dubai property market after almost two years of lull. Their reading was that if a stable government comes in after elections, a similar rebound would be in order in India as well,” said Jaxay Shah, vicepresident of industry body Confederation of Real Estate Developers’ Associations of India (Credai) and managing director of Ahmedabadbased Savvy Infrastructure. A large population of NRIs across the globe is from Gujarat. For an NRI, Indian property was at least 30per cent cheaper last year because of a combination of low prices and appreciating dollar against the rupee. Shah said it wasn’t just non-resident Gujaratis who invested in the state last year (like it has been traditionally).

He also saw many Indians settled in South East Asia and West Asia ,too, who are from different parts of India investing in Gujarat. In Kerala, another state, which has a huge NRI base, almost 65per cent of home sales in 2013 were to NRIs, up from about 55per cent in 2012, said Abdul Aziz, managing director of Skyline Builders. “NRIs pushed in a lot of money into property last year as prices were low.” These NRIs mostly bought highend properties in India, said Ashutosh Limaye, head of research at JLL. “But there were some savvy ones who also bet on emerging destinations,” he said.

For Bangalore-based Nitesh Estates, sales to NRIs made for about 20per cent of its luxury segment sales (of apartments in the Rs 5-20 crore price range). “Marketing spends for promotions to NRIs across markets have gone up significantly for us,” said Nitesh Shetty, managing director of the company. Several developers spent heavily on road shows in markets such as Dubai, the US, the UK, Singapore, countries where there are large Indian diaspora.

For Gurgaon-based builder Raheja Developers, at the time when the rupee was at its lowest in the middle of last year, almost about 50 per cent of the company’s sales came from NRIs. Home sales in India dipped considerably over the last 12-18 months because of the messy situation of the economy and a deteriorating job scene in most urban centres.

Source: ET – By Ravi Teja Sharma

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