Inflation has affected the entire real estate chain in India, and it’s only a matter of time before the price hike is passed on to the end-consumer, a top real estate developer said at the Gulf News India Property Show in Dubai.
“Before the commodity prices reflect on the property prices, NRIs should buy a house,” said Prasanna Rajah, Relationship Manager at Puravankara. “Inflation has pushed up the prices of steel, cement and sand.”
Irrespective of the economic crises, the Indian property market has done well to weather the storm, and is often a good hedge, he advised.
“We’ve seen multiple ups and downs in the market, but properties have been holding very good value,” said Rajah. “In general, when you look at capital appreciation and returns on investment, India has offered steady returns.”
Rajah said that NRIs have clearly understood this phenomenon and are driving the momentum in the post-Covid period.
“We are seeing developments across India doing well in the market.”
Rajah asked buyers not to panic due to increasing prices. “It basically balances out because you tend to get a steady rate of acquisition and Indian properties, especially in the south markets (Pune, Bangalore, Chennai) have been doing well in the last 24-36 months.”
“There has always been a momentary pause in the market,” said Rajah. “But the markets always bounced back. So, even this year, for the first quarter, we’ve seen a good comeback by major developers in terms of sales volumes going up.”
Close to pre-pandemic levels?
According to Rajah, the Indian property market is holding up to the pre-pandemic demand.
“The (Indian) markets got a very clear distinction, Indian developers have moved past the narrative of Covid.”
He reckons that NRIs have sustained the impact of Covid.
“The depreciating value of the rupee against the US dollar has encouraged NRIs to invest in India.”
Where to invest?
Rajah says that the southern and western parts of India have piqued the interest of NRIs in the past six years.
“We’ve been seeing an upsurge in terms of inquiries and sales conversions happening. It’s the cities like Mumbai, Pune, in the western markets, and Chennai, Kochi and Hyderabad in the south which are the top-performing markets for NRI customers.”
How much do you need to get started?
In terms of a two-bedroom apartment with good amenities and decent infrastructure, property prices in metropolitan cities hover around Rs5 million of investment. Premium luxury lifestyle homes start from about Rs10-11 million. Rajah said that the Indian developers are receiving interest from NRIs in both markets.
Demand in India’s luxury property segment
Rajah says luxury properties in Bangalore, Chennai and Mumbai are doing ‘exceedingly well’ in the NRI market.
“NRIs get acclimatised to the local conditions and to the local style of living,” said Rajah. “So when they look at relocating into a community in India, there are certain prerequisites that match the luxury property segment.”
Organised by Maxpo Exhibitions, in association with National Real Estate Development Council (NAREDCO), the two-day event recorded over 75 property transactions worth Dh58m+.
With over 2500 footfalls, Gulf News India Property Show hosted developers from across the country showcasing more than 500 residential and commercial properties in India.
The top five cities that sealed the deal in the two-day events are: Mumbai, Pune Bengaluru, Chennai, and Kerala