Financial Daily from THE HINDU group of publications
Tuesday, Dec 24, 2002
Industry & Economy
Real Estate & Construction
Indian realtors train eyes on Gulf market
ABU DHABI, Dec. 23
REALTORS from India are looking to tap the potentially big market in Gulf States such as Bahrain, Kuwait and Muscat following the very good response to the `Property 2002' roadshow organised in these countries over the past week by the Maharashtra Chamber of Housing Industry (MCHI) in co-ordination with the Confederation of Real Estate Developers Association of India (CREDAI).
Mr Zubin Mehta, the Chief Operating Officer of MCHI, who is in the UAE to oversee the roadshows in Abu Dhabi and Dubai on the last leg of the Gulf tour, told Business Line on Monday that there was a huge untapped market in Muscat, Kuwait and Bahrain which Indian realtors were planning to target in the coming months.
"We had, till the present Gulf tour, concentrated mainly on Dubai. But this current tour has been a learning experience. There are a large number of NRIs in these other Gulf states, who have shown a lot of interest in the projects presented by the participants in the roadshow. We plan to tap these markets in a bigger way next year," he said.
Around 25 leading property developers from Mumbai, Delhi, Pune and Bangalore are participating in the roadshows, offering properties ranging from Rs 1.5 lakh to over Rs 1 crore.
Mr Mehta said the real estate sector in India was poised to grow more in the coming year as interest rates on housing loans had dropped to its lowest levels in recent years. "The prices are at realistic levels now and we do not anticipate a major upswing in the near future," Mr Mehta said.
Moreover, the industry was expecting more sops in the forthcoming Budget, he said. "We have presented a strong case to the Finance Ministry to increase the slab on tax-free interest on housing loans. We are hoping it will be increased from the present Rs 1.5 lakh to Rs 2 lakh. This will boost investment in real estate," he said.
NRIs account for around 7 to 10 per cent of the real estate purchasing segment in urban areas, with Indian expatriates in the Gulf being the biggest customers. "We are also going to look seriously at potential clients in the Far East in Singapore and Hong Kong in the coming year," Mr Mehta said.
Stating that the response to the Gulf roadshows had been very good, Mr Mehta said most of the demand was for apartments though there had also been serious enquiries for row houses and villas. Bangalore, Mumbai and Pune were the three cities in major demand.
Most of the enquiries were from genuine buyers, he said, adding that speculative investments in real estate by NRIs had considerably reduced in recent years. However, high-end properties were not so much in demand this time as many high networth NRIs were looking at properties in Dubai, which was now open for purchase by expatriates, he said. However, this accounted for a very small percentage of customers, he added.
The advantages for buyers at these shows is that all the builders are under a self-imposed code of conduct introduced by CREDAI for its members. "Builders sign a bond by which they are liable to pay interest on the amount paid by the purchaser if they is any delay in possession of the property. There are also penalties related to non-fulfilment of promises regarding amenities on offer, etc.
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