Global real estate consultants and experts feel that the only real catalyst that could pep up the NRI spirit during this lean period is a significant price cut as it is the homecoming season for them. The price cut is expected to happen in the next three to four months.
The fact that prices are falling in the Indian real estate market has sparked off a new wave of interest among NRI residential property rates, prompting increased NRI participation in real terms, reported Economic Times. Sanjay Dutt, CEO- Business, Jones Lang LaSalle Meghraj said, “The promise of a correction in key metros and tier II cities has revived NRI interest in the residential market. We expect a number of scheduled transactions to happen by the end of the first quarter of 2009.”
NRIs are also expected to stay away from investing in retail projects and other property segments in unfamiliar and historically over-speculative tier II and tier III cities. The NRI preferences are also undergoing a market sea-change, where they are picking up only existing, and fully-leased assets by reputed developers.
The seeming lackluster approach of the NRIs has also influenced the business plans of some of the developers like Ganesh Housing. This Ahmedabad-based developer who is targeting NRIs with its luxurious villas and apartments in a 500-acre project has delayed the official launch of this project and is also thinking of a rejig.
Bhavin Mehta, the business development head of the firm said, “NRIs have become increasingly cautious while investing in property. They may invest as inflation lowers further next year. But for the time being the earlier euphoria is missing and people want to see the project before investing.”
After the fall-out of the sub-prime crisis in the U.S, NRI investors have woken up to the potential there. However, they are also aware that the meltdown has created attractive opportunities in India, as well. NRIs invest in India for more than just financial reasons- for them; there is a large component of sentimental value attached to owning a home in India. Many NRIs plan to repatriate at some point in time – and this fact is ensuring that India remains a priority investment choice for this segment.
