MANGALORE: The real estate and construction industries that are reeling under a crisis following Saudi Arabia's Nitaqat programme is hoping that the current depreciation of rupee against dollar will get them back on track.
DB Mehta, vice president, Mangalore chapter of Confederation of Real Estate Developers' Associations of India (Credai) and MD, Allegro Ventures, said that the industry is still not out of the crisis caused by Nitaqat programme as the programme has been postponed till November. "The rupee depreciation should bring back business. The property rates have not gone up in the past few months and the rupee depreciation has seen Middle East currency appreciate by 15%. And this should make buying property a good business," he added.
Nitaqat law was designed to localize labour. It was initiated by the Saudi ministry of labour. Under it, private firms are classified into Premium, Green, Yellow and Red categories based on their percentage of Saudization (local labour). The programme sets penalties and incentives for companies based on which category they fall under. Companies with less than 10 employees will not fall under this programme.
With expatriates from the Middle East being the construction industry's largest clientele, the demand had slackened since the programme was introduced by Saudi Arabia last year.
NorthernSky properties MD Dheeraj Amin, said, "NRI buying has slowed down. After the rupee depreciation we have a better inquiry ratio but conversion is not up to the mark. We expect it to pick up gradually."
Gulf dominates the local construction industry constituting 50% of the business. Of which one third is the share of Saudi Arabia, the rest is shared by local and outside markets from Mumbai, Chennai and Bangalore.
A Credai source said that of the 380 projects launched in May this year, at least 200 are still up and running, which is actually in excess of market demand.