Biz Wiz

NCR realty beckons NRI capital

Real estate has long been the hot spot for investment avenues not only in Delhi but in the entire National Capital Region (NCR). With tremendous growth in market capitalisation and extremely high demand pulling the market and a combination of well placed and timely investments in real estate, investors have reaped handsome benefits.

At present, the real estate market offers a host of investment avenues in the residential, commercial and mixed-use segments in the region. Demand has continued to be on the upswing owing to the commendable infrastructural development, improved connectivity via expressways and better highways, widespread reach of Delhi Metro Rail Corporation (DMRC) lines and favourable government policies towards development of special economic zones (SEZs) and business and education hubs all over the capital and its surrounding areas.

All individual regions have seen a massive upswing in built-up area and have a lot to offer to the investor at large. All these factors have led to massive demand, backed up by a frenzy of building activity throughout the entire National Capital Region.
There, however, seems to be a recent hitch to this dream run — the sharp decline in the value of the rupee. The past few months have seen the rupee register a steep fall, with a number of factors being responsible.

The biggest contributor to this turn of fortune for the rupee has been a globally volatile state of the capital markets. The record high current account deficit (CAD) and foreign investors giving up massively in the Indian markets have led to this state of our nation's currency.
Adding to these woes, negative exports and industrial developments have further aided the downfall. There have been a series of efforts from the regulatory authorities and Union finance ministry to improve the situation but these are either too meek or not timely enough to stem the continued downfall.
A look at the political scenario of the country is enough to tell that the situation is not good for the Indian economy, with more subsidies and other vote-bank strengthening measures being announced and employed to gain a political foothold. This leads to increased volatility and will continue to hit the markets hard in the long term as critical inputs such as fuel import prices will display elevated levels, leading to the overall economy being hurt and pushing the rupee further down.
This has led to Indian investors being a little dormant for some time now. This, however, opens up a window of opportunity for non-resident Indian (NRI) investors.

The falling rupee has both pros and cons for NRI investors looking to gain in the Indian real estate arena. On the up side, non-resident Indians may find it cheaper to invest, with the rupee falling to record low levels.
There are expected to be massive opportunities as prices come down for them. Those already in the process of finalising a property may save handsomely.

However, in the long run, since finalising a property takes a lot of time due to the efforts needed and time to be invested, the rupee may have appreciated, translating into non-resident Indian investors shelling out higher sums, by the time the investment is finalised.
Considering both the sides and taking into account the continued decline in rupee value, investors still stand to gain a sizeable sum if they invest in the right properties, backed by timely and proper documentation.

However, extreme caution needs to be exercised during such situation as there are a lot of pitfalls too. At such a time when the rupee is depreciating, there are a lot of options floated in the market that may be lucrative on the outside but lead to ripples in the investment portfolio if not painstakingly scrutinised.

There are several points to be taken into consideration while investing:-

Safe Deal: Property being considered should be approached through a firm of repute or options such as seminars and expos must be considered while exploring avenues to authenticate the process and property and avoid being duped.
Proper Documentations: As an investor, you should always ensure that all requisite documentation such as permits, bank release letters, 'no dues' certificates etc are in place. If not, the purchase of such a property may lead to substantial inconvenience and even a sizeable loss.
Property Related Issues: It should also be ensured beforehand that the property is free from any disputes and that the developer has the proper authentication to sell it.

If all these points are considered and taken care of, this is the most opportune time for a non-resident Indian to invest in properties in India as the market presents a plethora of options and conditions such as government regulations and policies and local currency value are all favourable for such an investment. At current levels of the rupee and the stagnant market situation,
which is not expected to relent at least for a few months, non-resident Indians can gain substantially by investing in the real estate market of their motherland.

It should, however, be kept in mind that the depreciation in value of the rupee is not always an opportunity but has to be made into an option through serious background checks and scrutiny of the offerings.

The writer is Premia Projects CMD
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