The ongoing crisis in West Asia is presenting a complex scenario for Mangaluru's real estate market, characterized by both potential opportunities and significant challenges. The city has long-standing ties to Gulf-based investors and expatriates, primarily due to its demographic connections and economic relationships. Experts in the real estate sector have indicated that if expatriates from Gulf nations were to return in large numbers, there could be a notable uptick in housing demand. However, this optimism is tempered by the reality that many expatriates currently employed in those regions are experiencing payment difficulties, which may hinder their ability to participate in the local real estate market.
DB Mehta, president-elect of Credai Karnataka, recalls that Mangaluru previously witnessed a spike in housing demand during the Iraq-Kuwait war when many expatriates returned home. At that time, property prices surged from approximately Rs 500 per square foot to Rs 1,500 by 1995, marking the introduction of high-rise residential structures in the city, a departure from its earlier layout culture. Mehta suggests that a similar phenomenon could occur if the current geopolitical situation escalates, leading to a sustained repatriation of expatriates from Gulf countries.
Moreover, the investor landscape appears to be shifting. Indian investors, particularly those from Mangaluru, have historically viewed Gulf real estate, especially in the UAE, as a secure investment opportunity with promising returns. However, the current uncertainty has instilled a sense of apprehension among these investors. Mehta notes that many individuals who entered the Gulf property market post-COVID-19 are now reevaluating their investments, with many considering returning their focus to domestic real estate in India as a safer alternative. He describes a palpable sense of panic among investors, reflecting the broader concerns about the stability of their investments in the Gulf region.
Local realtors, including K Shrinath Hebbar, managing director of Land Trades, and Rohan Monteiro from Property Corporation, emphasize that some Mangaluru homebuyers working abroad are facing challenges in securing funds and meeting payment obligations. This situation is creating ripple effects in the local real estate market. An additional concern raised by real estate professionals is that prospective buyers from the Gulf who were in the process of acquiring properties in Mangaluru may now reconsider their plans due to the ongoing uncertainty. As the situation evolves, the local real estate market will need to navigate these challenges while also remaining poised to capitalize on any emerging opportunities stemming from changes in expatriate dynamics.