Continuing from the previous post; if the Rupee does indeed go to 45 per Dollar, it will have a negative impact on the Indian propery market.
The Rupee had a free fall in the second half of 2011, going from about 44 to a Dollar in June to almost 54 in December. What this meant was that the Rupee lost almost 20% of its value against the Dollar in 6 months!
Now it is well known that Indians abroad are big investors in the domestic housing market. What happened in the last six months was that houses suddenly became very cheap for NRIs. A house that was costing 50 lakhs initially, would now effectively cost around 40 lakhs (almost 20% less)!
This increased buying from Indians abroad was a lifeline for the troubled housing market. Now if the Rupee does go to 45 to a Dollar, it will mean more bad news for the property developers..
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