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The continual rupee depreciation since couple of months does have an upside for the real estate market in Gujarat. Enquiries from non-resident Indians (NRIs) have risen for residential projects, say developers and industry experts in the state, due to additional discount in prices post rupee depreciation.
"Ever since the rupee began depreciating rapidly in the last two months, NRIs are able to finding real estate prices 25 per cent cheaper in dollar terms. This has encourage many NRIs, especially non-resident Gujaratis (NRGs) to expedite their plans to buy a property in the state as an investor or as an end user," said Vijay Shah, an Ahmedabad-based real estate developer and owner of M/s Vijay Shah.
Another real estate developer who is witnessing a significant jump in enquiries from NRIs is Rajesh Vaswani, executive director, Venus Infrastructure & Developers Ltd.
According to Vaswani, enquiries from NRIs have risen by over 40 per cent in last couple of months. "Money has started coming into Gujarat due to the rupee depreciation. In real estate market too, enquiries have risen by over 40 per cent. We are hopeful by October transactions will start happening," said Vaswani.
Further, enquiries are majorly rising for residential units, followed by commercial ones.
"It is basically the first generation NRIs who have settled outside the country but now want to buy a property here who are enquiring. Rupee may bounce back anytime. Hence, these investors are realising it is the right time to invest in real estate in Gujarat," said Neeraj Tomar, head - Ahmedabad operations of Jones Lang LaSalle India (JLL).
However, the real estate industry in Gujarat is also hoping that the domestic buyers also join the demand bandwagon.
"The trend of increased enquiries from NRIs is good for the short run. But in the long run, the real estate should depend on domestic enquiries, since that is where the economic growth comes from," added Tomar.
According to Shah, with the interest rates on home loans being increased in the recent times by banks and financial institutions, real estate demand among domestic buyers has taken a hit in Gujarat. "Enquiries from domestic buyers as well as investors has more or less died down though price correction hasn't happened yet. It is only the commercial segment to some extent that has seen some movement in the recent past," added Shah.
Meanwhile, due to the negative market sentiments coupled with lacklustre demand, developers are also focusing more on deliveries than just increasing supply, said Tomar.
