The depreciating rupee makes property in India a tempting investment
MOST of us know that India is regarded as one of the growing economies in the world right now. And that, as expected, has an effect on the various markets within the country. Therefore, its property market is very dynamic and growing exponentially.
According to various studies, the Indian real estate market is expected to reach US$90 billion (S$117 billion) by 2015. So, despite a recent slump in property demand in India's biggest cities due to high rates of interest and a general economic slowdown thanks to the Euro-zone concerns, property developers in the country are not a worried lot.
Reason: The growth in tier II cities and fringe townships around the metros are driving the Indian property market forward.
And, with the rupee hitting an all-time low of Rs54.30 against the US dollar on Dec14 (it dropped to Rs41.39 against the Sing $ the same day), there is never a better time for NRIs and PIOs to invest in property in India.
India's central bank, the Reserve Bank of India (RBI), has promised to stabilise the rupee - it imposed restrictions on forward trading in the middle of this month - and curb excess volatility, but the NRIs/PIOs earning in foreign currencies can still benefit from the depreciation of the rupee.
Therefore, Housing Development Finance Corporation (HDFC) is bringing the India Homes Fair to Singapore at a very opportune time. To be held at Suntec's International Convention & Exhibition Centre on Jan 14 and 15, it will have over 50 developers from across India exhibiting more than 300 projects to help Singapore-based NRIs and PIOs pick up a dream home in the country.
HDFC's managing director Renu Sud Karnad tells tabla!: "Not only have the number of developers at our fair gone up, but also the number of projects on display across price range, size and locations which will provide more choices to the customers."
The fair, which is being held in Singapore for the third time, drew more than 5,000 visitors in 2009 and more then 7,000 this year. HDFC is expecting more than 7,500 visitors at its fair next month and has geared up by taking a larger space - 1,990 sq m - as compared to 1,770 sq m at the previous fair.
This time, the fair will feature developers from cities like Chennai, the National Capital Region (which includes New Delhi, Gurgaon, Noida, Greater Noida, Ghaziabad and Faridabad), Mumbai, Bangalore and Pune. Besides these, there will be developers from other cities as well.
Mumbai-based Lodha Group's senior vice-president of marketing Samujjwal Ghosh tells tabla!: "It is always a wise decision to invest in property, especially in an attractive real estate market like Mumbai. The overall macro-economic indicators in India also remain fairly robust - many Indian professionals settled abroad are looking to return, given the business opportunities as well as the improving lifestyle choices available to them."
The Lodha Group is currently developing over 27 projects in Mumbai, from prime locations in Napean Sea Road to suburbs like Dombivali. And visitors at the upcoming India Homes Fair can choose from its range of super-luxury residential projects to mid-income luxury homes.
Bangalore-based Sterling Developers' director of sales and marketing Ratan Kanal stresses that there is no better investment option than real estate, as the economic scenarios of the last few years have shown. He says: "This is the best time to buy property, especially in markets like Bangalore, since prices have now started rising due to sustained buying.
"This is particularly true because of the volatility in the global and Indian stock markets, mutual funds and other investment options. Real estate is now being perceived as a safe haven for investment with decent returns on the investments."
Sterling Developers, a first-time participant at the India Homes Fair, will be showcasing its premier properties at the event.
Even though the interest rates are at an all-time high, market pundits in India are encouraging buyers to seal the deal when it comes to property. Their reasoning is that besides a marginal correction, prices are headed only one way - upwards.
The base rate, the minimum rate at which a bank can lend to any customer, has increased sharply in the last one year. The base rate of India's three largest banks - State Bank of India, ICICI Bank and HDFC Bank - has increased from eight per cent at the beginning of the year to 10 per cent now.
Chennai-based real estate developer Isha Homes' managing director Suresh Krishn says: "A lot of corrections have already happened in the property market and there may not be much downtrend in the real estate market in the years to come."
Stating that Isha Homes gets 10 to 12 per cent of its NRI/PIO business from Singapore, he added that it will be exhibiting some of its top properties at the India Homes Fair.