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A maintenance worker grooms a golf course in front of high-rise apartment blocks under construction in Noida, east of New Delhi. Photographer: Prashanth Vishwanathan/Bloomberg
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Signature Island, a residential tower developed by Sunteck Realty Ltd., stands under construction behind two office buildings in the Bandra Kurla complex in Mumbai. Residential home sales in Mumbai dropped 17 percent to a three-year low in the final quarter of last year compared with the previous quarter. Photographer: Dhiraj Singh/Bloomberg
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People walk dogs past a house in Telok Kurau district in Singapore. Sales of Singapore private homes dropped in December to 632 units, the lowest in two years. Photographer: Sam Kang Li/Bloomberg
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An attendant opens the door at one of the apartments at the Imperial residential towers in the Tardeo area of Mumbai. Photographer: Pal Pillai/Bloomberg
Vivek Sharma, like many Indians who came to
Singapore for work, failed to jump into the island state’s booming property market before the government imposed taxes to deter foreign buyers.
Now, he is joining thousands of his compatriots who are taking advantage of the drop in the rupee to a record low in December and seeking to buy property back home -- for rental investments, homes for left-behind family members, retirement properties and residences for their own eventual returns.
“I missed the opportunity to buy property in Singapore when I moved here 2 1/2 years back,” said Sharma, 38, a medical-device manufacturing executive who was among 3,300 attendees at a two-day home fair in January where 53 Indian developers were showcasing their properties and discounting them to boost sales. “Now, prices have risen a lot, and with the new taxes, it makes better sense to invest back home.”
India’s property market may attract $3 billion from overseas buyers this year, almost double last year’s $1.6 billion, Shobhit Agarwal, joint managing director at the Indian unit of
Jones Lang LaSalle Inc. (JLL), the world’s second-biggest, publicly traded commercial-property broker, said in an interview in Mumbai in December. About one-third typically comes from individuals like Sharma and two-thirds from investors, he said.
Sales Declines
The volume of property sales has declined in
India’s biggest cities, including Mumbai, New Delhi, Hyderabad and Bangalore, after the nation’s central bank
raised borrowing costs by a record 375 basis points since March 2010. The bank is seeking to curb inflation, although property prices remain at or close to record highs.
At the same time, the rupee fell 16 percent against the
U.S. dollar in 2011, the worst performer among Asian currencies. The currency has since recouped some of its losses, climbing 7.7 percent to 49.45 to the U.S. dollar last month. It is forecast to fall to 52.25 in the quarter ending in March, according to the median estimate in a Bloomberg survey.
India’s record trade deficit may turn developing
Asia’s best-performing currency in January into its biggest loser from now until the year-end, strategists forecast. The rupee will drop 1.2 percent in the rest of 2012, based on the median prediction of 22 analysts in a Bloomberg survey. That is the worst outlook among the region’s 10 most-traded currencies excluding the Japanese yen.
Agarwal at Jones Lang LaSalle said India’s property prices may decline 10 percent this year, and that with a potential 20 percent loss in the currency, property purchases will become even more attractive to overseas Indians.
“They get a net 30 percent discount, so they will be ready to write the check,” Agarwal said.