MUMBAI: Now is the time for developers to offer incentives to attract customers, particularly non-resident Indians. A senior executive at a housing finance institution says it is working on organising a property event targeting NRIs.
Given the slowdomestic market, developers are looking at opportunities to increase sales. Ironically, the same factors that have contributed to the lacklustre market and the resulting 30 per cent slide in the value of the rupee, give NRIs opportunity to benefit greatly when buying a house.
The executive said that although the NRI segment is a ready market that can support sales, developers should do their bit to help buyers make make up their minds. Market conditions are bad and even those with deep pockets are slow to take a decision about making a huge investment.
TOP GEAR MARKETING
Road shows, property fairs and marketing events are on the increase overseas as Indian developers gear up to tap the market.
Arun Kumar, managing director, Casa Grande, says NRI interest has tripled in recent months. Normally, there are 15-20 enquiries a month, he says, but this has gone up to 80-90 a month recently.
Buyers want to commit as much money as their budget allows as they want to take advantage of the rupee’s slide. And why won’t they, he asks. At the current rates, paying up for a house is about 20-30 per cent cheaper compared to a few months back. An apartment costing about Rs 2 crore can be bought now for about Rs 1.40-1.50 crore in dollar terms. Casa Grande is seeing 2-3 bookings a week in its luxury projects, Kumar adds.
The company has increased its visibility online to tap the opportunity in online marketing as NRIs use the Internet as a primary search tool. The company has also been participating in property fairs in Singapore and Malaysia in the last two months and reaching out to various Indian associations.
Normally, online ad spends are about 2-3 per cent of Casa Grande’s total advertisement budget; it is now up to 10 per cent. The interest is primarily in high-end projects such as villas, Kumar says.
Varun Manian, managing director, Radiance Realty, says conversions — that is, enquiries leading to transactions — in overseas property fairs are certainly on the increase. Radiance has participated in events in Singapore, Malaysia, West Asia and the UK.
These events are also generating more leads for developers to follow up.
According to Manian, developers need to focus on the US market. The largest potential in terms of volume and value is in the West, but not enough events are happening over there. While an online presence certainly helps, property fairs give potential customers the touch and feel experience that is important in real estate matters, he points out.
He believes the NRI market is still in the wait and watch mode.
With reports of the economic situation — whether fiscal deficit, forex reserves or other indicators — still predicting a continued slow, buyers are willing to wait some more as they expect the rupee is set to lose more value. In high-value projects, a buyer gains significantly even if the slide is by one rupee. M. Murali, managing director, Shriram Properties, says demand and sales in the NRI segment has increased significantly in recent months but has been slowing down in the last few days as potential buyers wait to gauge the emerging trend.
He is confident that when some clarity emerges, the NRI segment will open out and prove a relief in an otherwise slow market.
About one-third of the enquiries in Shriram Properties’ projects in Bangalore, Chennai and Vizag are normally from the NRI segment but this has now increased to about 45 per cent. The company is looking at more road shows and possibly an increased marketing presence in the major markets overseas, he says.
R. Kumar, managing director, Navin Housing and Properties, says NRI customers are waiting for the rupee to bottom out or show some signs of stability; then there is bound to be a rush for properties.
Unlike in interest rate cycles, when a buyer dependent on a home will see multiple ups and downs during a 15-20 year repayment period, a rupee devaluation on this scale will be relatively rare .
NRI buyers will try to exploit this opportunity and try to make maximum down payment. Even the difference of a couple of rupees represents a huge saving. Developers are gearing up for this, he says.
With land costs increasing and the cost of other inputs, including building materials, labour and finance, on the rise, developers have limited options to cut prices.
However, the slide of the rupee represents a very real opportunity for buyers, Kumar says.