WAITING IN THE WINGS
Wednesday, 21st May, 2008
NRIs are the major drivers of the real estate market especially in the northern India, in particular in Punjab. As of now the real estate market in the state was going through the regular highs and lows. When the local buyers and sellers are waiting in the annexes of the market to make attractive gains, so are the NRIs.
According to the experts the transactions in buying and selling in real estate which involves the NRI community have increased in the past two years. This rich community has helped scale up the market prices by investing heavily in the real estate sector. The NRI community and IT professionals were on the top of the list when the local and national players were busy launching their residential projects. With a positive response from the NRI clientele, most builders focused on the luxury apartments and put the comparatively cheaper segment on the backburner.
The turndown in the market disappointed the NRI investors also. In the boom years, during the festival season, NRIs invested heavily especially Diwali. The national real estate developers, a company that had reserved a huge portion of its new luxury project for the NRI population. It had also focused heavily on marketing in foreign countries for attracting the NRI community. However the company failed to get the expected response.
The strategy of the builders and developers has changed due to the withdrawal of NRI money from the market. There has been a gradual movement to budget housing from the luxury apartments. The expected growth in the IT industry in the region did not materialize beyond the initial euphoria, and the investment push expected from the NRI investors also did not come about in the last two years. So the prices of the residential projects, where were kept high keeping this clientele in mind, have become untenable with the ground reality. The result is that builders are stuck with their projects as the NRI investors have withdrawn and the prices are too high for the locals to afford.
The uncertainty of the government policy regarding real estate licensing, especially the environment policy regarding the real estate projects has also scared away the NRI investors.

