Non-resident Indians are in a strong position as the market slows and interest rates rise.
Exhibitor numbers grow at Dubai Indian Property Show
The number of exhibitors at the Indian Property Show in Dubai has risen by about 25 per cent, organisers say.
Sunil Jaiswal, the chairman of Sumansa, the show’s organiser, said there are 152 exhibitors this time, compared with about 120 at the prior show, six months ago.
“The builders in India have seen a slowing in the market,” Mr Jaiswal said. “India’s interest rates are rising, the stock of property available is growing. There has been a huge boom in property development, so people are being rightfully cautious.
“To create demand, the developers naturally look to the non-resident Indians (NRIs) who have historically bought lots of property in India. They come to the UAE to make money and develop wealth, and with the exchange rate the way it is, properties are basically 25 per cent cheaper in India.”
The rupee has fallen more than 20 per cent against the dirham this year, giving the Arabian Gulf-based NRIs more buying power back home, a situation of which developers are looking to make the most of.
“We expect to make about US$260 million in sales over the three-day event,” said Santosh Tandel, the head of regional sales for Indiabulls Real Estate Agents.
“As the rupee has been falling it has created a good environment for investment, so much so that we have opened up a representative office here in Dubai to meet the constant demand.”
India’s domestic economy may be struggling but developers are still launching new projects across the country. The global property consultancy Knight Frank recently reported a 1.7 per cent drop in house prices across India, with the property consultants CBRE South Asia report confirming the rash of development.
“Despite the poor economic sentiment, residential supply spiked during the January-June period. More than 65,000 units were launched in the leading cities compared to about 48,000 during the second half of 2012,” says the report.
Property investors see India’s economy being challenging for developers, but property is seen as a solid investment in the country.
“Demand may get pent up but it doesn’t disappear,” says Mr Jaiswal. “When things slow down the demand sits and waits for conditions to become favourable and when they do you see the result. Right now for an NRI things are favourable in India. If the interest rate goes the other way then that may change, but right here, right now is a great time for NRIs to be buying in India.”
The show continues today and tomorrow, from 11am to 8pm, at the Dubai World Trade Centre.