Right time to buy property in India

Whether it is buying property in India or investing money in the stock markets, the best time is now. After the global financial meltdown, demand in the property market has slowed down considerably thus leading to a correction in property prices. The euphoria of the property market in 2006 has weathered down. At that time, the stock market touched unprecedented heights and the capital appreciation happened very fast, which led to more liquidity. The economy was doing well, more jobs were being created, salaries were rising at a good rate and people had more disposable money in their wallets. Consequently, property developers, too, pushed property prices to unaffordable levels. Many prospective buyers were left out in the cold and the dream of that perfect house seemed elusive.

However, now, there has been a much desired price correction in the market. The over all prices of property have come down and the builders are also offering huge discounts to buyers with cash down payment offer against ready to move in properties. This has skewed the balance in favour of the buyer. Also, the job market is seeing consolidation and the salary hikes are expected to be moderate this year. However, it is a chicken and egg situation as because of the slowdown, there is acute liquidity crunch in the market. Real gainers at this time would be those who are sitting on cash and can strike killer deals with ready cash payment options.

By some estimates, the property prices have come down by 20-30 per cent. In markets like Delhi/NCR, the drop has been more dramatic to the tune of 50-60 per cent. Other big cities like Chennai, Bengaluru and Hyderabad are also feeling the heat. Thus, it is the best time to enter the property market, especially for those who want to buy houses for self-use. Even banks that were earlier going slow on home loans are now focusing on this segment and looking to lend loans below Rs 25 lakh. Recently, RBI reduced the capital requirement for home loans. This would facilitate banks to do aggressive lending. Banks are coming out with attractive home loan offers for the small ticket segment. House loans are now becoming a priority for the banks. All this makes buying a house now an affordable option.

When the demand increases, there will be more profitability for the builders too. The buyers are also now putting in effort by slashing down prices and putting up attractive offers on one bedroom, two bedroom and three bedroom apartments. This will drive sales further. For ready to move in houses, builders are offering special discounts and cutting down prices. Even their focus is now on the mid-income group to bring houses within the reach of this consumer group. All this bodes well for the buyers who can now bring their dream house to reality.

In the last few years, when the property market was at its peak, premium apartments were the rage. In fact, in places like Gurgaon, property rates had shot up from Rs 1,900-2,200 per sq ft in 2004 to Rs 6,700 per sq ft in 2006. However, now, these prices have come down by 15-25%. Thus, this definitely is the best time to buy as the property prices have not escalated for over a year and in some places, the prices have dropped significantly. For those people, who made money in the stock and property market before the beginning of the slowdown, it is boom time. They are sitting on ready cash and sellers who want to liquidate their assets will offer them heavy discounts in lieu of cash down payments. They can now look for bargain deals an invest money in the property market.

Many property developers dealing in premium apartments are now focusing on completing existing projects instead of launching new projects when the slowdown began. Now, as their real estate projects are nearing completion, they are willing to offer discounts to the tune of 40% for ready to move in apartments.

It is a sad situation for those who bought properties at the peak time solely for investment purposes. They had expected further escalation in the prices. Now, when the demand has dropped suddenly and prices have also come down, they stand to lose. The best thing for them to do would be to hold the property for some more time if they don’t need to liquidate it immediately. In that scenario, they will have to settle down at lower prices. Thus, it is a beneficial situation for buyers and end users of property and real estate.

Also, it will be a good idea to look for properties in suburban areas. For instance, areas adjoining Chandigarh such as Zirakpur and Mohali can offer good bargains at this time of property slowdown. Thus, it is a good idea to enter the property market now for those who were waiting in the wings. There are good offers and good deals waiting to be taken.

Geetika Jain writes on behalf of 99acres.com,which is an internet portal dedicated to meet every aspect of the consumers needs in the real estate industry. It is a forum where buyers, sellers and brokers can exchange information. At 99 acres, you can advertise a property, search for a property, browse through Gurgaon Real Estate and property in India