City builders bridge the Gulf

With Mumbaikars shying away from investing in property, builders have found another avenue to boost business

City builders bridge the Gulf

With Mumbaikars shying away from investing in property, builders have found another avenue to boost business. They have now decided to cash in on the low sentiments of NRIs in countries, especially in the Middle East, grappling with the economic crisis.

As a first step in that direction, the Maharashtra Chambers of Housing and Industry (MCHI) has scheduled a property exhibition in Dubai between June 4 and 6 to showcase projects between Rs 15-70 lakh. These will include homes in Ghatkopar and beyond in the eastern suburbs and Andheri and beyond in the western suburbs.

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J Augustine, co-chairman of the international exhibitions committee, MCHI, said, "The Indian economy is moving towards stability. The reduced property prices and the advent of a stable government have put us in a better position than a lot of other countries. So, NRIs in Dubai see Mumbai as a better place for investing in property at the moment."

Brokers dealing with NRI clients are of the same opinion as builders. Prem Batra, a leading real estate broker, revealed that enquiries from the Middle East, which had dried up during the peak of the recession, have restarted.

Santosh Naik, owner of Disha Direct, a real estate brokerage firm dealing with NRIs, said, "There is no doubt that NRI buyers are turning back to the Indian market, but most of them are looking for projects that are ready for possession or are on the verge of completion."

Added another market expert, "The other reason for the increased interest in properties in the city among NRIs is job insecurity. Unsure of the future, they are assessing the option of coming back to India."

NRIs speak

Dubai residents agree that India is a safer place to invest in than the Middle East. K Johnson, a Dubai-based NRI, told MiD DAY, "It is true that the situation here is not good. I know several people who have made investments in Mumbai."

Ryan Divakar, account manager with an advertising agency in Dubai, echoed Johnson. "There is no doubt that the Indian market is in better shape than the Dubai market," said Divakar.

Dubai downturn
About the Dubai real estate, a leading website said, "The classified ads in Dubai read like an obituary for the real estate market that until a few months ago seemed immune to the global financial crisis."

For a market that surged fourfold over the past few years, the Dubai real estate market is now in a precarious position. According to leading international newspapers, the cost of a seven-bedroom villa on the exclusive Palm Jumeirah dropped to 19 million dirhams (Rs 24.68 crore), from 30 million dirhams (Rs 39 crore).

Even as buyers stay away from new purchases, the financial institutions are tightening lending procedures or freezing it altogether. Banks that were offering up to 80 per cent credit on the homes have now reduced it to 50 per cent and less.