Recent downfall in Indian real estate has made many Non-Resident Indians (NRIs) to rethink their property investment plans in India. There has been a drop of 50-60% bookings by the NRIs over the last three months owing to tight liquidity conditions in the international markets. What’s more, many NRIs are cancelling their earlier bookings as well.

Developers such as Parsvnath, Omaxe and Hiranandani Developers said that there has been a dip in the NRI buys over the last few months despite the dollar remaining firm vis-à-vis the rupee.

According to Pradeep Jain, chairman, Parsvnath Developers there has been a 50-60% drop in bookings since September. “Over the last three months, the impact of recession in US has been felt strongly in the Indian realty market. If 100 bookings were being made earlier, today that’s not more than 30. This situation may continue till liquidity situation improves in foreign markets,” he said.

The US subprime crisis and the global economic downturn have also taken a toll on the NRI community. “There have been atleast 15-20% cancellations over the last few months. NRIs, who had booked properties earlier, are now hit from all sides as the rupee has depreciated a lot. Hence, the current sentiment is very negative,” Vipin Agrawal, executive director, Omaxe, said.

There have also been some changes regarding their preferences which have undergone a change in the wake of the slowdown. Sanjay Dutt, CEO (business) of Jones Lang LaSalle Meghraj (JLLM) is of the view that NRIs are no longer interested in promised returns on investment. They prefer to choose only existing, fully-leased assets by reputed developers.

“Once there is a dip in rates over the next three to four months, we will see increased NRI participation. We expect a number of scheduled transaction to happen by the end of the first quarter of 2009,” Mr Dutt said.

The recent terror attacks, however, haven’t played much of a role in creating this decline in investment. Niranjan Hirandanani, MD of Mumbai-based Hiranandani Developers, admits that it has had a much lesser impact on property investments than what he had perceived.

“Terror attacks have not had an impact on NRIs looking at investing in Indian property market. It could have had a wider impact, but it’s not much in realty. Interests in real estate are still intact. There is money coming in… maybe just not at the same level as before,” said Hirandanani

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