Expatriates boost demand for residential properties

The ongoing Iraq conflict has brought good tidings for realty developers in Mumbai.

With tension rising in the US and the Middle East, Non-Resident Indians are flocking back home, which in turn has increased the demand for housing.

According to Maharashtra Chamber of Housing Industry secretary Sunil Mantri.

"Compared with 2002, the housing sector has witnessed a 25 to 30 per cent growth in March this year. The NRI community is seeking accommodation in the Rs 25 lakh (Rs 2.5 million) cost range in areas of central Mumbai such as Wadala, Worli and Parel."

The MCHI has attributed the heightened house-buying to the changing mindset of Indians living abroad in the wake of the 9/11 terrorist attacks on the World Trade Centre in the US as well the war in Iraq.

According to MCHI, majority of the NRIs are looking settling down in Mumbai. "Owing to the recent war in Iraq, investment options in Mumbai are increasing. NRIs from Iraq, Kuwait and America are seeking to relocate, and are investing in Mumbai's property market based on the security factor," Mantri said.

Dharmesh Jain, managing director, Nirmal group, said, "While January saw a 10 per cent increase in the demand for houses (compared with last year), March witnessed a 40 per cent growth. There is also an increased demand for customised (fully furnished) flats from NRIs."

Jain says that in the wake of the ongoing war in Iraq, the number of inquiries received by his company rose 40 per cent in March compared with February.

Adds Ecohomes India, managing director, O P Monga: "Realty agents and builders have confirmed the rise in the number of NRI flat buyers. With the increased transparency among developers, customised houses, competitive pricing and easy availability of home loans, the city is seen as a perfect destination."

However, the downside of the war is expected to be felt in the commercial property markets as well. A lull may be witnessed in transactions if the war continues much longer since multinational companies are likely to put their investment decisions on hold.