Developers hope for NRI-boost to real estate

AHMEDABAD: Gujarat Institute of Housing and Estate Developers' (GIHED) upcoming annual property show is expected to become a major draw for NRIs as the event is happening during Navratri.
"We have received many inquiries from NRIs from the Middle East, the UK and USA," said GIHED secretary Dipak Patel. He said US-based Gujaratis have shown keen interest in buying properties in Ahmedabad.
According to Patel, many Gujaratis settled in the USA are looking to invest in properties before 2013 considering that transfer of funds from USA is going to be taxed later.
Industry sources said NRIs consider Ahmedabad as a more stable market compared to other Indian cities. In some pockets, prices increased amid slowdown.
"Prices declined 20% in cities like Mumbai, Hyderabad, Bangalore and Delhi after October 2008 till mid 2009. But, Ahmedabad was a study in contrast," said Nirav Kothari, resident director, Jones Lang LaSalle (JLL).
Builders in Ahmedabad, according to Kothari, also did not face any debt pressure unlike their counterparts in other cities.
Tata Motors stepping into Gujarat with the Nano project also attracted investors that include around 10% of NRIs.
According to him, there has been great demand for preleased commercial properties from NRIs. Such properties can yield returns ranging from 12% to 20% on investment, which they would not get in their respective countries.
Property consultant Kishor Dedhia said high-end properties in residential segment in western part of the city would be a major attraction for NRIs.
Overseas inquiries are pouring in after the Ford and Peugeot announced projects in Sanand, said Dedhia, adding that entry of corporates like Godrej, Adani, Tata and Arvind are also luring them.
Builder Sanjay Jain said that on an average 15% to 20% bookings in high-end apartments and bungalow schemes come from NRIs. Apart from proposed tax on fund transfer, new jantri rates would offer more transparency in property deals to NRIs, said Jain.
Janak Shah, a Chicago-based banking professional, who visits Ahmedabad during Diwali, said, "I heard about the property show. This time I made it a point to visit during the event to understand the property market and investment opportunities in and around Ahmedabad."