It’s Modi Sarkaar – Real Estate Prices are at War!

Confused? The elections are not over yet & we have published this post already! We agree that it is only a matter of time before the title of this post becomes a reality. The title of this post sounds a little lot controversial. We would request our readers to first spare few minutes to read this post before forming any opinion.

As we had clearly mentioned in our earlier post that the real estate market is going through turmoil & one of the reasons behind that is the uncertain political scenario in India. When we tried to decipher what will happen next, we came up with the following findings:

#AbkiBaarModiSarkaar, #WeWantModi & other trends are trending high on Twitter & other social media these days. A lot of air has been created around Modi being the next Prime Minister of India & everyone (mostly) is speculating high gains & social development with a change in the governing body of India. #RealEstate is also no exception to the speculation. Analysts & specialists are betting on high gains in this sector too. This is due to positive sentiments & anticipation of new & investor-friendly Government policies.

FDI in Real Estate

With a change in the Government of India, the much talked about FDI in Real Estate will become a reality & that will give a boost the Indian Realty Sector. With the improvement in infrastructure & basic amenities due to this foreign investment, many new housing & infrastructure projects will flow in the Indian markets causing the sector to lift up.

Realty Stocks Rally

Stalkers of Stock Market must have noticed the recent surge in the otherwise failing real estate companies’ stocks. If not, just have a look at the following charts:

BSE Realty Sensex

One can easily notice the sudden increase in the realty sector of Indian markets. Reason – positive sentiments for the anticipated change in the government!

Enthusiasm amongst NRIs

As we have already communicated in our earlier post about NRIs <link>, the non-residing Indians already had an opportunity to make investments in real estate India the rising Rupee against Dollar is creating a virtual race among them to reserve a property for good investment as soon as possible.

Moreover, as is a known fact that a major chunk of NRIs belong to Gujarat State of India. With the air of Mr. Narendra Modi becoming the next Prime Minister of India, all these NRIs are extremely keen on making the investments.

Disclaimer: The above post is just a thought child of the writer & doesn’t have any political intentions. This is just an analysis of future possibilities in the real estate sector. Investors should make their calculations & analysis before going for any investments.

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Is this the Right Time for NRIs to Invest in India?

NRIs (Non-Resident Indians) comprises of an important chunk of population which contributes the most to Indian economy, without even being physical present here. India is blessed to have such a huge Indian population fueling its growth from abroad and the same is true for NRIs, who are blessed to have India as their motherland which provides them such fantastic investment opportunities. Let’s see how.

INR vs. $: Who all get benefitted with their movements?

 If you follow the Asian Financial and Economic markets, you would know what is going on in the volatile Indian markets. INR has been falling continuously against US $ before lately regaining some strength. At the time of writing this post, INR was placed at Rs. 61.20 against $ 1. But the situation had been worse a few days back when INR had touched Rs. 67 = $ 1 mark, creating an all-time low record; So much so that people had started comparing INR with US Cents; Rs. 1 = 1.5 cents.

So how is the above information related to our topic on NRIs? Well, let us tell you how. We will be extremely straight forward in putting forth our views on this topic. Consider the following situation:

• Mr. A is an NRI, residing in Michigan, USA.
• He aspires to invest in India and his obvious choice would be to invest in Real Estate; because he is sane ;-).
• He wants to invest in a range of INR 5 million to INR 7 million.
• Let’s compare the scenario when INR was 67 and when it is 61 (rounded off for simplicity) against $.

Cost of Property	Cost in $ (Case: INR/$ :: 67)	Cost in $ (Case: INR/$ :: 61)	Absolute Difference	% Difference
INR 5 million	$ 74,627.00	$ 81,967.00	$ 7340.00	9.8%
INR 7 million	$ 104,478.00	$ 114,754.00	$ 10276.00	9.8%

Just look at the above figures. Mr. A would have saved a fortune, at a discount of ~10% if he would have invested in the same property when $ was making rounds near INR 67 as compared to the current situation!

Closing Thoughts

Dear NRIs,

India is a great destination for investment – this statement needs no evidence. So just be a little more rational and act as soon as possible to make investments. This is because you never know where our new Governor & upcoming new Government will take the INR ;-). It is always better to be late than never J.

Sincerely,

RealT Horizon

PS: We would have made the investments if we would have been in your place, you may not. It’s subjective as well as cognitive.

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