Indian property developers are anticipating a 30 per cent surge in sales to UAE-based purchasers after the rupee sank to a new low against the dollar.
Rupee decline sparks property boom from UAE expats
Indian property developers are anticipating a 30 per cent surge in sales to UAE-based purchasers as the rupee sank to a new low against the dollar last week.
The rupee fell to a record 59.93 against the dollar on Thursday after the US Federal Reserve signalled that it could start to wind down its financial stimulus plan.
Some experts expect it to sink even lower over the coming six months before staging a recovery.
"The number of inquiries we have been receiving this year has increased by almost 500 per cent," said Nishant Singhal, the director of strategy and alliances at Investors Clinic India, which specialises in advising Indian resident in Dubai on investing in Indian property. "Last year we were getting perhaps 100 calls a month from the Dubai market. Now we're getting more like on average 400 to 500 calls every month."
The rupee has been falling steadily since August 2011, prompting developers from the subcontinent to increase their marketing push overseas. The currency has fallen nearly 30 per cent from 44.06 rupees to the dollar in August 2011 and has depreciated by almost 8 per cent over the past four months alone.
"It's definitely not good news for people back at home, but if you are a non-resident Indian [NRI], this is definitely the best time to invest," said Alok Anchan, a sales manager at Rajesh Lifespaces. "At the moment any non-resident Indian buying a property in India in dirhams saves around 7 or 8 per cent on his property value. And moreover off-plan property can appreciate in value by 20 per cent in two years so invariably he's at a 27 per cent profit," he added.
Property prices in India's most popular cities have risen rapidly in recent years despite the global financial downturn. According to Jones Lang LaSalle research, prices in Mumbai have risen by 66 per cent between 2009 and 2013. In Thane the increase was 70 per cent over the same period. And in Gurgaon and Bangalore there were increases of 52 per cent and 46 per cent respectively.
The news has led to speculation from some economists that the country is facing a potential "housing bubble" although little evidence of this has been seen so far.
More than 17,000 visitors flocked to Dubai's largest ever Indian Property Show at the weekend in the hope of snagging a bargain off-plan property back home.
"Although most of the developers here expect to sell 20 to 30 per cent more than last year we are selling more than that," said Santosh Tandel, the regional head of IndiaBulls Real Estate in the Middle East which last November set up its own Dubai sales office to cope with demand.
"At the end of the show we expect to have sold between 70 and 100 per cent more than last time, which equates to around 100 properties. At the moment sales from the Gulf make up around 35 per cent of our total business," he said.