Analysts expect to see a further downturn in the days ahead.
With the Indian rupee under pressure for the past few months and declining to its lowest-ever levels, real estate players expect non-resident Indian, or NRI, investments in the sector to gain momentum.
A weaker rupee against the US dollar makes investment in India cheaper for foreign investors and NRIs. Stakeholders say that the NRIs' off-take in the property market constitutes around 7-8 per cent of the country's total real estate inventory.
Already, NRI investments in Indian real estate have touched $10.2 billion so far in the current financial year, up from $8.9 billion invested in FY2017-18, according to a recent report by consultancy firm 360 Realtors.
"This growth is largely driven by five cities, Mumbai, Pune, Bengaluru, Gurugram and Noida," the report said.
Owing to the ongoing currency depreciation, the first half of 2018 has witnessed enquires from NRI investors, which would eventually lead to the Indian real estate business growing gradually over a period of time, thus creating a positive impact on the sector, Ashok Mohanani, Chairman, Ekta World, told IANS.
Mumbai-based Nahar Group's Vice Chairperson Manju Yagnik feels the 7-8 per cent share of inventory generally bought by NRIs, would go up this year.
"As per industry reports, approximately 7-8 per cent of inventory is being bought by NRIs each year," she said, adding that with the current trend "it is estimated that investments from NRIs will rise to about 10-12 per cent".
According to Rajan Dang, founder of property portal Zvesta.com, with the current valuation of the rupee, foreign investors buying property in India are getting appreciation of "12-15 per cent while investing from USD to INR" and with forecast of the dollar strengthening further against rupee and other major currencies, "gross appreciation will reach 20-22 per cent in property prices for foreign investors".
Speaking of the source countries of NRI investment in the country's property market, CEO of NCR-based HomeKraft, Prasoon Chauhan, told IANS that major investments come in from the Middle East, US, UK, Canada and Australia.
"This is an excellent time for NRI investors to get properties with savings of 10-20 per cent depending on currency exchange rates of the day," Chauhan told IANS.
However, there are also cautious voices among stakeholders, who do not see much of a spike in NRI investments and a change in status quo for the largely tepid Indian property market.
Aunirban Saha, Director of Noida-based SAHA Groupe, said: "According to my research, there has been no impact as such. Neither there has been increase in investment nor inflow of money."
He further noted that, traditionally, NRI investments take place around Diwali, as they know there are discounts in the market during that time and they know they would get even better deals then, regardless of the currency fluctuation.
"Currently the market sentiment is very, very low, especially in the north and Delhi-NCR, because there is a lot of over-supply and deliveries are stuck. So the sentiment is very low, and for this reason too investments are not coming," Saha told IANS.
Consultancy firm India Assetz' CEO Shivam Sinha said: "In the short run, obviously it will have an impact, but the rupee also is not that volatile. Yes, it impacts; but does not impact to that extent."
The Indian currency has been on a decline for over a month now, in line with currencies of other emerging markets, and it touched an all-time low of 72.98 on September 18. Analysts expect to see a further downturn in the days ahead.
Although a weak domestic currency is considered a disadvantage for the economy in general, it can also be seen as an investment opportunity for individuals as well as institutional investors.
"Since real estate is considered to be a long-term investment, foreign investors chance upon the depreciating Indian rupee. Thus, the depreciation in currency has a long-term impact on the overall investments made in the country," said Abhinav Joshi, Head of Research, CBRE India.