In the past few years, the residential apartments in Kolkata and other metropolitan cities in India, has faced and overcome numerous challenges. Demonetisation, stringent housing laws and a credit crunch has led to stalling projects and leaving developers with excess inventory. To make situations worse, the global pandemic has resulted in jobs losses, increased unemployment and salary cuts.
The first quarter has witnessed a drop in real estate sales by 40% on an average.According to Knight Frank India, housing sales has fallen to its lowest in a decade in the first six months of 2020.
However, falling currency values, NRI’s homecoming and lower home loans rates have contributed to a sharp rise in housing demands from them currently. According to Amit Goenka, MD and CEO of Nisus Finance Services Co. Pvt. Ltd., more than 40,000 NRI inquiries to purchase assets in India has been reported. Demands from Africa, Europe, and Asia, including the Middle East is predicted to contribute to 15-20% of annual demand in 2020.
How are developers viewing this increase in overseas inquiries? Have there been an increase in demand for apartments in Kolkata from NRIs?
“We don’t want the NRI sales to be at 50% forever. That’s probably not the healthiest dynamic,” Pirojsha Godrej, executive chairman of Godrej Properties, said during an investor call following first-quarter earnings. “We actually want our sales from locals to go up significantly.” Pirojsha, however, said the NRI demand helped fill an obvious gap in the first quarter. “We have seen a continued sustained demand in at least July from NRIs,” he said. “We aren’t suggesting we expect for the full year to see 50% of sales from NRIs, nor would we consider that desirable.”
NRI demands differ from local home buyers due to a difference in their lifestyle outside India. Larger homes integrated with all modern facilities are preferred by these home seekers. Ready-to-move properties or under-construction properties with possession available under a year is mostly preferred by NRIs looking for apartments in Kolkata or metropolitan cities. Developers offering a similar property with a smooth transition to online services are highly benefiting from these inquiries. While regular site visits are not opted by many due to risk of transmission of the virus, virtual walk-through organised by many developers have proved to be a boon for them. It is expected that post pandemic, virtual tours and online transitions to provide a complete customer experience shall become the new normal and ease sales activities for most developers. Developers offering flexible payment options with 10% or 20% of property value to be paid upfront and remaining after possession have more chances of conversion from these inquiries.
Online property purchase is no more a future prospect-it is the present and is here to stay. To keep up with the changing demands, digitization is not only mandatory, but also the best way to stay ahead in these competitive times.
