Good time to buy property in India

Discussion in 'India property' started by julian, Aug 13, 2006.

  1. MadhavJha

    MadhavJha New Member

    All time is good to invest in Indian property...
     
  2. laxmanavantika

    laxmanavantika New Member

    As far as real estate is concerned, of course the first two option comes before everyone's mind is India and China. Of those two due to so much of rules and regulations, China is more restricted compared to India. In India it's booming at a rapid speed in last few decades.
     
  3. easyloans

    easyloans New Member

    It is the best time. And you can make money as the very easily in Indian market in a short time.
     
  4. Akriti Shah

    Akriti Shah New Member

    Hi, I don't disagree with your views however, these media reports leave me baffled about the current state or future of real estate sector. As per the reports, builders are sitting on 70,000 crore worth of unsold inventory and that India is heading for 50% collapse in prices. There has to be an equivalent demand vs supply and at an affordable prices.
    You may refer to media reports or this forum will act as a good reference point of information with all the expert members.

    Good luck!
     
  5. Ritu Mehta

    Ritu Mehta New Member

    As we look at how the residential real estate market is behaving this festive season, developers and the consultants are on the same page while accepting that it continues to go through a slow time. Many developers still have their backs against the wall financially, and have been challenged to complete or show convincing progress on their under-construction projects.

    Unfortunately, fact this has been overly hyped by the media, and even developers who are well capitalized and fully able to complete their projects have been tarred by the negativity brush. This has resulted in a drop in overall confidence from buyers, who are worried that they will commit their money into properties which will not be delivered on time.

    Economic Signals

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    The economy has not shown the kind of perk-up which everyone had hoped for. However, matters have definitely improved over what we were seeing this time last year. All in all, the market's outlook is improving. The RBI's recent interest rate cut has helped improve sentiment, which is an important driver on the real estate market.

    With this rate cut, the RBI sent an important signal to the market that inflation is under control, and that it is confident about economic growth. Such signals definitely have a positive effect on buyer sentiment. However, in terms of actual pertinence on property purchase, the impact may not be very significant - especially in expensive inner city areas in cities like Mumbai. If property prices are in any case unaffordable, a marginal reduction in the cost of borrowing will not make a difference. The reduction in interest rates will have a bigger impact on buying behaviour in less expensive markets, such as peripheral locations of the larger cities and tier 2 / tier 3 cities.

    Pricing & Correction Outlook

    In the last four quarters, the prices in Mumbai increased by 3.7%, prices in Chennai increased by 1.5% and no change recorded in the prices of Delhi-NCR. This presents a more or less stable scenario, which is likely to continue for another two or three quarters. Though many fence-sitting buyers have been waiting for real estate prices to correct, it is unlikely that any large-scale 'shock disruption' is imminent.

    Corrections are very location-specific as well as developer- specific, and will happen where nothing else will work to encourage buyer activity. In cities and locations where there is still sufficient demand and prices are more or less affordable, there will be no correction, while they will certainly happen in areas where affordability is a deterrent to buyer sentiment.

    However, much is already happening to make real estate more affordable. Across cities, developers have been actively re-configuring their projects to align with market demand, in the process saving on costs and passing on the benefit to buyers. Also, a majority of the new housing project launches have been at lower rates than those of earlier projects launched in the same locations in such category projects.

    NRI Investment Action

    If we take a step back from domestic real estate consumption and look at demand coming from across our borders, the outlook looks very upbeat. Currently, non-resident Indians (NRIs) are extremely active in investing into Indian real estate. In fact, NRIs are among the top five investor communities in the country's property sector. Apart from their natural affinity to India and the fact that NRIs see a higher intrinsic value on Indian real estate over property owned elsewhere, purchase decisions are also being spurred by the Indian rupee's ongoing weakness against the US dollar.

    To Summarize

    It is at best a mixed bag of market readings this festive season - but is it a good time to buy? Definitely, considering that buyers have never been more spoiled for choice - and, for that matter, bargaining power. Also, we are seeing hard discounts as well as offers to waive stamp duty and registration charges, VAT, service tax and floor rise premium - all of which translate into an actual saving on the cost of the property. More than in many of the preceding years, this festive season is an ideal time to zero in on the best deal and make that dream home a reality.
     
  6. Ankita Patel

    Ankita Patel New Member

    I too agree. In Asia, India is the best booming country especially for real estate. The important cities are Bangalore, Chennai & Hyderabad
     
  7. Ritu Mehta

    Ritu Mehta New Member

    With huge inventory lying unsold across the country, the road to recovery looks long and winding for the real estate sector. According to experts, it will take another five years to sell the 7 lakh units, but lack of buyers' interest will make it more and more difficult for developers to complete existing projects. Even the festive season and the recent round of rate cuts by the Reserve Bank of India (RBI) have failed to bring cheers to the real estate market. Lack of a regulator and delayed reforms have also prompted people to stay away from real estate. Property prices have remained stagnated.

    According to real estate consultancy firm JLL, in the last four quarters prices in Mumbai and Chennai increased by 3.7 per cent and 1.5 per cent, respectively, while in Delhi-NCR prices remained fl at. The trend is likely to continue. Though the situation is expected to improve this New Year, experts say, it won't be as good as 2010/2012, and will take a few more years for the sector to revive. Here is a lowdown on how the real estate sector is expected to perform in 2016.


    PRICE OUTLOOK

    Those who are looking at quick profits should not invest in properties because realty prices are not expected to rise sharply. Says Anuj Puri, Chairman and Country Head, JLL India: "Though many buyers have been waiting for real estate prices to correct, it is unlikely that any large scale 'shock disruption' is imminent
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    Expectations were high that after the new government comes to power, a new lease of life would be infused in the sector but nothing has happened so far. Sanjay Dutt, Managing Director, India, Cushman and Wakefield agrees: "While we expect the situation to maintain a 'status quo' during 2016, the impact of these developments will gradually set in towards the end of 2017 or early 2018." However, unlike the residential market, commercial projects are showing signs of a revival. Says Samantak Das, Chief Economist and National Director, Research, Knight Frank: "In 2015, the office market continued a growth trajectory and may touch transactions of 39-40 million sqft. The top six cities in India has seen slightly more office space transactions compared to 2014," he says, adding that the turnaround of office space has not had positive effect on the residential sector.

    NEW LAUNCHES

    Now that investors are preferring financial assets over physical assets, developers have cut down on new projects. Moreover, end-users have not been buying properties feeling let down by the developers. Stretched deadlines for completion of projects has shooed buyers away from the market. The trend is expected to continue in 2016. According to a recent Knight Frank report, new project launches in NCR stood at 11,360 units in the fi rst half of 2015, registering a massive 68 per cent drop from the corresponding period in 2014. However, several steps have been taken to make real estate more affordable.

    According to experts, many new housing projects have been launched at lower rates compared to similar projects launched in the same location. The Knight Frank report says residential projects under the Haryana government's affordable Housing Policy 2013 contributed significantly to the new launches in NCR between January and June 2015. Approximately 43 per cent of the total new launches fall under the scheme.

    UNSOLD INVENTORY

    Unsold inventory is a key indicator for the real estate sector. Rising levels of inventory indicate the lack of demand in the market. Says Dhruv Agarwala, CEO, PropTiger and Makaan.com: "Unsold inventory had reached very high levels in the beginning of 2015. It has come down slightly in the past two quarters due to a slowdown in new launches.

    We expect it to come down further, as new launches will continue to go down and developers will focus on liquidating the existing inventory." Lack of buyers' interest has also impacted property prices, which either remained stagnant or declined across all major cities.

    According to a research report from Prop Tiger, in the fi rst quarter of 2015/16 property sales fell by 18 per cent across Ahmedabad, Bangalore, Chennai, Gurgaon, Hyderabad, Kolkata, Mumbai, Noida and Pune. Experts, however, say the situation is expected to improve. "2016 will not be very different in terms of unsold inventory pressure in the top six cities. However, the second half of 2016 is likely to see some improvement," says Das.

    POSITIVE SIGNALS

    Regulator. The real estate market in India lacks regulation, transparency and systematic process. A regulator for the sector will help buyers and investors to rebuild their faith on builders and developers.

    Online buying: Developers have realised the potential of online medium in terms of reaching out to people. Says Agarwala: "Although these are early days in India for home transactions on the digital platform, I believe it will grow.

    Portals will come out with newer features and solutions that would provide easy access to every potential customer directly on his or her smartphone."
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    Interest rate cut. Experts say RBI may cut interest rates further and this could trigger demand in tier II and tier III cities. The RBI has cut the repo rate by 125 basis points (bps).

    Banks have, however, been slow in passing on the benefi t of the rate cut to customers, reducing home loan rates by only 30 to 35 basis points.

    Therefore, it may not be a good idea to invest in real estate in 2016. For end-users, however, it is certainly the right time. But, before you take the plunge, don't forget to bargain for your dream home.
     
    Last edited by a moderator: Apr 11, 2016
  8. nmb

    nmb Well-Known Member

    Population growth, economic growth and perhaps more importantly a more transparent property regulatory environment all bode well for the future. There may be some ups and downs along the way but surely the long-term prospects for the Indian real estate market are very good?
     
  9. Prithvi

    Prithvi New Member

    The real time stagnant factor will be very much fruitful for buying in the 'sought after' category considering the very much cloudy moods of real esate in India.
     
  10. Bhushan

    Bhushan New Member

    This is very good advantage for India that real estate business is booming here.
    Thank You
     
  11. Praraz Kumar

    Praraz Kumar New Member

    Real estate market in India is booming now. This is right time to buy property.
     
  12. Longterminvestor

    Longterminvestor Administrator

    Is demonetisation still having an impact upon the market? Is it not too soon with many experts predicting further falls in the short term?
     
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