The reaction to this week's slide in the Indian rupee has had an immediate impact on Dubai's property market.
state agency sources have confirmed cancellations of appointments by investors in India that were to take place over the next fortnight.
While a few cancellations by themselves may not amount to much in the wider scheme of things, it does reflect concerns among India-based investors about the current rupee-dollar exchange rate and compounded by the weakening state of the Indian economy.
Such concerns have been magnified in the last few days, with the rupee hovering Rs54 (Dh3.62) to the dollar and expected to drop further.All through last year, buyers from India were quite active in Dubai's property market, particularly in the premium end.
The Downtown was proving particularly interesting for this class of buyers as well as apartments at the recently completed upscale high-rises in Dubai Marina.
In the mid-tier market, units in Business Bay also got a lot of attention, which sent values rising to Dh900 a square foot from Dh750-Dh800 just four months ago.
"Along with investors brought in by the Arab Spring, buyers from India were visible since the second half of 2011 and the first quarter of this year," said an estate agent.
"But over the past week the impression we get is that Indian buyers are spooked by the currency volatility and will now wait awhile to size up where it is headed."
But Deepak Lalwani OBE, director for India at the London-based investment consultancy Lalcap, said prospective investors could even look beyond the currency.
"The bottom line is what counts and the perception is the Dubai property market has bottomed out and a sustainable rising trend has started. The weakness of the rupee will be offset by the rise in property prices."
For now Lalwani's sentiments are decidedly on the minority side.
"Even last year there was a period of volatility for the rupee — though not at these levels — and which led to potential Indian investors sitting it out," said an estate agent.
"The currency situation will have no impact on the extremely wealthy Indian investor community, many of whom have already acquired prized properties here. It's the investor base just below them that would be affected by the current fluctuations."
Interestingly enough, currency volatility elsewhere — in the Eurozone — is having a more bene-ficial impact on another property investment destination — London.
With nothing but uncertainty forecast for their economies over the mid-term, there has been a spike in wealthy Spanish and Greek investors scouting around for London property deals in April.
Boost for local buys
A strong dollar could even have Indian residents in Dubai now making a move on property in India rather than buy here.
"At nearly Rs15 to the dirham, many Indian residents would find it easier to commit on a property acquisition in India," said a mortgage adviser with an Indian bank. "Especially if this is going to be the range for the rupee to the dirham."