Wednesday, February 25, 2009

NRI realty investments drop by over 50%

NRI realty investments drop by over 50%
26 Feb 2009, 0044 hrs IST, Avinash Nair & Parag Dave, ET Bureau

The result: NRI investments in India-based properties dropped by over 50% this season, with the four metro cities and “NRI-heavy” mirco markets in states like Gujarat and Kerala being among the worst hit.

“Compared to last year, the drop in NRI interest in India-based properties has been almost 50% in all sectors. The metros showed a sharp drop in demand, largely owing to the steep prices”, says Sanjay Dutt, CEO - business, Jones Lang LaSalle Meghraj (JLLM), a global real-estate consultancy firm. “Very few luxury homes have been sold as compared to last year”, he adds.

At a time when the domestic demand in micro-markets in Tier-I, II and III cities began to slump in the third quarter of this financial year, the developers were hopeful that the demand from the NRIs will pep up the sentiments in the realty markets.

However, the global slowdown and the resulting slump froze the bullish sentiments among NRIs. “Though a far-from-spectacular number of transactions have indeed taken place this season, generalised job insecurity and a desire to conserve available cash among IT employees abroad has curbed investment demand for high-end properties, Mr Dutt said adding that the response was “significantly muted” from the NRI community this season.

The sharp corrections seen in some larger cities has also led to an “acute wait-and-watch attitude among NRIs who - just like everyone else - are now very price sensitive”, he explained.


Anonymous said...

developers were hopeful that the demand from the NRIs will pep up the sentiments in the realty markets - looks like developers need to read international news if they are being hopeful on NRIs...hopeful on NRIs-very funny

Anonymous said...

NRI were feeling rich by one time bonanza as US housing in coastal/urban areas jumped 3 times until 2006. Giddy w/ lust, these NRIs jumped at the opportunity to buy so called luxury units in india. Such a surge of buying inevitably raised indian realty to a huge bubble.

Now the NRIs feeling poorer and are facing margin calls. So who they gonna call? The indian realtor to dump their properties.
W/ IT coolies dafaulting hither & thither, the beginning of INDIAN RE BUST is upon us.

Anonymous said...

DLF’s accounts probed

Feb. 25: The government is investigating the acco-unts of real estate giant DLF to see whether it understated its sales to pay lower taxes. “A special audit under section 142(2A) of the I-T Act has been ordered in the case of DLF for the assessment year 2006-07,” the minister of state for finance, S. S. Palanimanickam, said in a written reply in the Lok Sabha.

The audit report of DLF was received on December 31, 2008, and is being examined.
Hyderabad-based technical analyst, Mr C. Kutu-mba Rao, said several realty companies, including DLF had recorded “exp-ected profits” in the books after entering into development agreement with the land owner.

The normal procedure is to record profits after the sale. The “expected profits” boosted the balance sheets. However, the companies could not realise the “expected profit” as property rates bottomed out, Mr Rao said.

This might have prompted the income-tax officials to investigate DLF’s accounts for probable boosting of figures. With the announcement of the probe, almost all realty stocks could see their prices plummeting, Mr Rao said. DLF could fall by 20 per cent on Thursday, which is the last day for futures and options settlement. The DLF share closed at Rs 154.50 on Wednesday.

Anonymous said...

Did you catch the 2007 bus?

Getting early bus is not good, every time. Now the risk of cancellation
& uncertainty has pushed the RE into vicious cycle. Buyers need to
consider downward price risk + uncertainty risk before arriving at fair
price. In addition to above risk, individual needs to consider job risk before
making 20 years commitment.

So guys let it fall then only pick up, minimum 50% price cut is guarantee.


Anonymous said...

Government Bails out Builders through SBI in India

More Frauds at

Frauds of India

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