MANGALORE: The depreciating rupee may be a concern for the economy, but builders here are laughing all the way to the bank. The real estate here which was reeling under pressure due to high interest costs and inflation is suddenly active again from the past couple of weeks with a slew of new projects being launched. In the past three weeks 16 new projects totaling a minimum of a thousand apartments have been launched indicating robust demand and stepped up activity in the construction sector here.
PMA Razak, president, Mangalore Chapter of the Confederation of Real Estate Developers' Associations of India (CREDAI), told TOI that the falling rupee has made investment in real estate an attractive proposition for NRIs. Razak said an NRI who wanted to buy property here had indicated that NRIs were averse to buying property in the Middle East due to the uncertain climate and wanted to invest here as rupee had depreciated by 30% which made investment here attractive. Due to rupee depreciation, a Rs 60 lakh worth of property here now costs United Arab Emirates Dirham (AED) 3.75 lakh, which was costing AED 4.44 lakh just a month back.
The same holds good for all Middle Eastern currencies like Saudi Arabian Riyal (SAR), Bahrain Dinar (BHD) and Kuwaiti Dinar (KWD). Razak says 82% of the bookings in ongoing projects from his firm Plama Developers, of which he is the chairman and MD, are NRIs. A project becomes viable if there are 50% bookings and almost all Mangalore projects have close to 60% bookings,'' he said. Also, he notes that there is a strong demand from Mumbai-based Mangaloreans who want a second home in the city. Making investment attractive is the pre launch rates which are Rs 100 to Rs 50 less per sq ft.
At present the going rates for properties in the city range from Rs 4,000 to Rs 4,500 per sq ft and in the outskirts it is Rs 2,700 to Rs 3,500 per sq ft. Inland Infrastructure Developers MD Siraj Ahmed says the inflow of funds into property sector has increased by 25% from the earlier 50% due to rupee depreciation. At the same time not all money is flowing into real estate as NRIs perceive the property prices here are high from returns of investment point of view. So money is also getting locked in high interest deposits,'' said Ahmed whose majority clientele is NRIs.
Source: http://articles.timesofindia.indiatimes.com/2012-05-28/middle-east-news/31876715_1_nris-rupee-depreciation-dirham
