Mid-November, an international real estate advisory firm said India's real estate sector will continue to remain an attractive investment destination with the possibility of prices in residential areas appreciating by 91 to 145 per cent in select cities over the next five years.
Knight Frank pointed out that despite the slump in the real estate market, Mumbai will continue to be the most promising investment destination followed by Delhi-NCR, Chennai, Pune and Bengaluru, Knight Frank Executive Director (retail, advisory and hospitality).
But by early December, the apex body of Indian developers asked its members to seriously consider "selling off maximum inventories by reducing prices."
"The developer community is willing to consider the suggestions made by the Finance Minister P Chidambaram to unlock the value of the unsold stock. We have asked our members across the country to seriously consider the proposal to sell (the unsold stock) in maximum numbers," Confederation of Real Estate Developers' Association of India (CREDAI) national president Lalit Kumar Jain said.Do the above two statements matter for UAE non-resident Indians (NRIs)?
Ashish Mehra, who works in Dubai as an accountant, says: "It puts me in a Catch 22 situation. I have been hearing a lot about an impending correction in Indian property market... but I haven't seen any. My top priority is to save to buy a home in India. And that's what I am doing and I will soon buy a property back home."Kamlesh Mehra, a Dubai-based businessman, says: "I have already bought properties in Mumbai and they have given me a good return. For me, as an investor, I believe this is not a good time to buy in India. Dubai properties are cheaper right now than in Mumbai. I would invest here than in India."
But buy off plan or a ready unit?
Some Indian property developers taking part in the 11th edition of "Indian Property Show", starting December 13 to 15 at the Dubai World Trade Centre, say NRIs are looking at buying "off-plan" or, at least, with a realtor who is offering them a deferred payment plan.
Jatin Patel, VP Business Development, Bhartiya City, Bangalore, states: "Off-plan purchases have for years returned solid yields for the astute investors in the Bangalore property market. They have benefited from the discounted prices from developers as well as capital gains from a growing market by buying early."
He adds deferred payment plans are designed to give an opportunity to pay over an extended period of time for example construction-linked plan.
"In this plan, one has to pay the cost in the form of pre-determined installments to the builder in tandem with the development of the property. The advantage of this approach is that it gives you time to pay up, the developer does not end up charging too much at the outset itself and hence the buyer does not have to forego interest earned on their own money by paying up too much too early."
KR Raghavan, Vice President - Sales & Marketing, Ozone Group, also opines that NRIs are considering buying off plan as it saves pre-equated monthly installment interest towards loan.
A survey conducted by Sumansa Exhibitions, organisers of the "Indian Property Show", has revealed 26.7 per cent of NRIs are looking to buy property as an additional investment, which is a six per cent rise compared to last year. 89 per cent of them will invest in properties worth Rs1 crore (Dh700,000) and above.
The survey, conducted among 16,000 NRIs across the UAE, found Mumbai, Bengaluru and Delhi featuring in the top five destinations list, suggesting that the larger Indian cities offer higher returns.
? Emirates 24|7 2012
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Source: http://www.zawya.com/story/UAEs_NRI_dilemma_Buy_India_property_or_not-ZAWYA20121212032548/
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