Realty on the rise

The recent rupee plunge has opened a world  of investment opportunities in the realty sector in Kerala

The Indian economy has suffered a major setback with the value of rupee collapsing still further to a lifetime low of 66.59 against the dollar. While it is not good news for the Indians living in the country, NRIs are gearing up to reap the benefits of falling rupee. Bank remittances and investments have shot up, so also the demand for Indian real estate among the NRI community.

     The rupee depreciation has made real estate investments in India more attractive for the NRIs. Commenting on this trend, Alex Babu, managing director, Hedge Equities, says, “It is a big incentive for NRIs looking to buy properties in Kerala and especially those looking for residential properties.” As per the report by National Housing Board (NHB) index, Kochi property prices have not been appreciated much in the last couple of years. In fact from the base of 100 created in 2007, it is still only at 86. “This rupee depreciation has incentivised buyers to buy cheaper by 25-30% even with stagnant prices,” adds Babu.

     Owning a property in Kerala was a distant dream for the middle class Malayalis, but not anymore. “With the falling rupee value, my NRI son in Kuwait is contemplating buying an apartment in a good location in Kochi,” says K Sreedharan, a retired army officer, who has already made enquiries with a couple of top builders in Kerala.

     The realty market in Kerala is definitely looking good and is a good opportunity to invest in property. “The month of August recorded the highest sales for us and bookings have doubled compared to the previous month,” admits Lava K, managing director, SFS Homes. According to him, new launches, fair pricing and good location are also deciding factors attributing to the growth in sales. “One trend noticed is that the local enquiries and buying has gone up all of a sudden,” says Lava, whose buyers are mostly from UAE, Kuwait and Qatar.

      Apart from this, the rising mall culture has also contributed to a rise in investments in the realty sector. “With numerous malls and infrastructure development coming up in the state, combined with the weak rupee value, there isn’t a better time than now to invest in property in God’s own country,” says Mathews Jose, managing partner, M&L Realty.

      However, real estate consultants feel that though NRIs are showing a lot of interest in buying property, it will be a slow process since investments are quite large and a lot of money is involved in it. Experts predict the rupee depreciation is just a passing phase and is not beneficial in the longer run. Whatever be the case of the economy, the recent fall in the Indian rupee could potentially act as a trigger for the NRI community to switch focus towards real estate investments.                                                                                                                                       
- sherene joseph

PS: (This article on the rising realty sector owing to the rupee depreciation was published in the Mumbai Plus, Mumbai, on 07 Sep.13)