It was surging realty rates that priced out many buyers in 2007, and 2008 got even worse with high interest rates and inflation making a home of your own more elusive.
All that may just reverse this year.
“This year, the gloom in realty will lift as the market turns buyer-friendly,” said SK Garg, chairman of realty company Eldeco.
Property prices have already seen some correction and are likely to ease further this year. Home loan rates are headed back to where they were in 2003 — that’s when the last realty boom started.
The realty sector, which slumped amid a global economic meltdown that roiled markets worldwide last year, is crucial to reviving the Indian economy. Its direct and indirect contribution to the country’s gross domestic product is variously estimated to range between 15 to 20 per cent.
A recent study by the Federation of Indian Chambers of Commerce and Industry said prices in the residential housing market are expected to ease through the next four quarters, although there will be time and cost overruns in existing projects and a possible delay in new projects.
Anshul Jain, India head of DTZ International Property Advisers, said he expects residential property prices to fall another 15 per cent by March.
The government has already taken measures to make home loans affordable, but the key to turning around the sector lies in the ability of realty companies to delivers houses at affordable rates.
“Buying opportunities are going to emerge in 2009,” said Sandeep Goel, managing director, MSX Developers. “While interest rate cuts will gradually improve affordability, price cuts will be essential to revive demand. This is what will play out in 2009.”
Developers, experts said, would increasingly switch their business models to make money by creating volumes rather than protecting margins.
“The year is headed towards being favourable for end users. The recent price cuts by developers and rebates in home loans will offer best deals to all… The present scenario is favourable for end users as they can bargain for the best deal,” said Rohtas Goel, CMD, Omaxe.