Indian developers woo expats as economy falters

Indian developers woo expats as economy falters

www.mangaloretoday.com

Abu Dhabi, September 7, 2013(Gulf News): India’s builders grappling with rising inventories and increasing cost of capital amid a marked slowdown of the country’s economy are wooing expatriates living in the UAE to buy residential apartments and villas from them, touting the record fall in the Indian rupee versus the dollar and the dirham as the clincher.

Towards this end, a two-day property exhibition “India Property Fest” at the Emirates Palace was inaugurated by the Indian Ambassador to the UAE, M.K. Lokesh, yesterday which showcases countrywide properties of more than 15 developers.

 

According to latest figures from the Indian government, for the April-to-June quarter, the country’s economy grew at a rate of 4.4 per cent, compared with the same period in the previous year. In the last fiscal year, the Indian economy grew at 5 per cent, the slowest rate of growth in nearly a decade. The fiscal second quarter growth was weaker than the first quarter this year when the growth was 4.8 per cent.

To compound India’s problems, the rupee plunged to a record low late last week of 68.85 per dollar, for a drop of 20 per cent this year. The rupee has been one of the worst affected by the turmoil in emerging markets since May, when the US Federal Reserve hinted it may rein in its $85 billion a month stimulus programme. Investors are bracing for the end of ultra-easy monetary conditions that had driven many emerging markets to record highs. The rupee’s plunge means increased buying power in India for those who have disposable income in the UAE, and that’s the segment the builders are out to tap.

This week, India’s central bank barred banks from providing upfront housing loans for under-construction projects through innovative schemes termed as “80:20” or “75:25” by the developers, which came as a blow to the realty sector.

“It appears, the real estate sector in India in the coming months, is going to slowdown further. The outlook for the sector is looking gloomy because of our slowing economy,” Siddhesh Priolkar, Assistant Vice President - Marketing at Indiabulls Real Estate told Gulf News.

Good discounts
He said for their project located on the outskirts of Mumbai, Indiabulls is offering good discounts to potential end users. Citing an example, Priolkar said there are discounts of up to Rs1.2 million on booking a 2 bedroom apartment whose price starts at Rs5,999 a squarefoot. For upfront payments, there’s a down payment discount as well.

“We are giving away the clubhouse membership free, there are no floor rise charges and no preferential location charges, but these are being given for free only if you book with us now,” Priolkar added.

Natasha Goel, Assistant Manager at ATS Infrastructure Ltd., a reputed builder from north India, said there’s a dearth of buyers for high-end properties in the Indian market. “Living costs in India are increasing, but the incomes haven’t kept pace with the rise in inflation,” says Goel, whose company has apartments to sell priced in a range of Rs3 million to Rs29 million. “That has eroded the purchasing power of potential buyers.”

However, her comments are tinged with realism. “The non-resident Indian (NRI) customers are not enough to buy out all the properties,’ she says. Despite the builders efforts, the visitor turnout at the property show was low on the first day.

Mahendra Chaudhary, area sales manager — Gulf of Artha Developers, a realtor from southern India said they have been able to make only two bookings since the start of the show. “We are hoping there are more footfalls on Saturday,” he said.

Prakash Ramsinghani, relationship manager at western India-based Falco Developers said they have a project in which investors can get 18 per cent assured returns from the developer under a buyback scheme.  The project is located in kalyan, a Mumbai suburb where Falco is building some 3,000 flats.