Times of India (May 29, 202)
The depreciating rupee may be a concern for the economy, but builders
here are laughing all the way to the bank.
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.
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