Welcome to 2018 when the dollar vs rupee battle has taken a historic turn. The rupee has fallen way beyond its limit and as of today, the dollar rates have crossed 70 INR, which is a one of the lowest of all lows.
Why this is happening is another story but someone’s loss is someone’s gold. NRIs and foreign institutions are all set to take advantage of this fact and invest in India, because there is more money to be made on the sidelines.
Many international investment bodies such as Blackstone, Brookefield and GIC have been up with their investment efforts in India. They’re looking to take more advantage of these facts and continue investing in residential properties of India.
“NRIs there are coming together as consortia and opting to buy properties in bulk, in deals worth Rs 100-150 crore. They are not buying individual flats but entire wings and even buildings. This way, they can immediately start putting them up for rent,” Prateek Shroff, an international property consultant in Mumbai, said.
You can clearly see that disposable income is being pumped in India’s real estate sector even when it’s not performing so well, to make long term gains.
This can be prove to be one opportune moment as NRIs and other foreign companies get to invest for 10-15% lower amount of cash without moving a finger. This is not only a chance but a big invest opportunity.
Resources say that a similar thing happened in 2013 as well, when rupee plummeted drastically and an overall rise in property investments was noticed, but this time, the things are different.
Why will it pay off?
Over the years, the worsening condition of NRI Indian real estate investment was finally being restored by government policy and a horde of investments being made in all parts of India. Certain property circles that were dead from years were beginning to show some improvement after all.
Such changes can be attributed to RERA, which has helped in increasing buyer confidence in property by putting stricter conditions on real estate scams and improving investment conditions for the buyers.
Right now, Indian markets are poised for profit and while the domestic population is still to cash on that, the NRIs are jumping the queue. Investments made today promise a great capital return in coming few years and what better way would it be when you get 15% discount on a property deal.
Therefore, NRIs who are investing in real estate today are making sure that their cash is in safe deposit and will offer flying returns in coming three years.
Why to be careful?
While the time is great to make some money by investments, there are even more chances for scam at this moment.
If you’re an NRI, your dealing with Indian real estate needs to be sound enough to get you the returns you’re aiming at. It won’t be as simple as picking a cake in the bakery shop down-street.
There are several real estate advisors who would want to pounce on this opportunity to make fraudulent deals or lure the NRI interest into something that has no future prospect.
You need to be careful of whom you’re going to deal with before you invest any money in India’s real estate. We advise you to run a quick research on the properties you want to invest and make sure that they’re classified as safe investments in India. If you’re in doubts, consult multiple property consultants and get the best vote in.
NRIs on a Rush
Several property investors from around the world are reporting that large sums of money are being invested in India’s real estate by NRIs.
There’s inflow from Hong Kong, UK and USA. Even with several legal hurdles on the path of buying property in India, there are efforts being made to cling on to the best properties in India from all parts of the world.
This could give India’s real estate a temporary push for the season and may prove beneficial for the coming times. The market that has been low since ages can finally reap some of the fruits that it was so desperate to have now.
Realty takes in Rupee
In some sense, the circumstantial events that lead to falling of rupee are aiding the realty. Even if the rupee is to fall, the realty is making hefty gains out of it, which may balance out the international losses being reported by India.
For now, we can’t say how long will this property bubble will last but till the time it’s there, it can help India’s property sector get a headstart.
Effect of Elections 2019
As we know that general elections are poised for 2019, and the realty market is going to another hit. The fact has actually contributed in decreasing international interest in property.
Investors like Blackstone are wary of their money and a withdrawal of around 2300 crores was reported recently due to the same fact by several foreign investors.
All of this is in the light of major turnover that comes with each election. The 2014 elections didn’t really help in improving the condition but the inception of RERA was a big step. Now we have to see how do these elections turn out and what will be the impacts.
Not a lot is expected though. It doesn’t matter which party wins, the property sector will slow down after all the major efforts that have been made to pull India’s realty out of dark.
NRIs looking to take advantage of this sudden plummet of rupee need to be careful with their investment; the rush hour can end up in bad decisions if they don’t consult an experienced real estate advisor.
The chances of getting heavy returns are there and the temporary discount for NRIs is something to be cashed on. There won’t be such deals anytime soon, especially in the light of upcoming elections.
The dangling property market of India is set for many changes in coming two years and this short lived bubble may help the real estate with the little push it needs to improve its conditions.