This way home
Looking for your dream house? With real estate prices crashing by over 20 per cent, the next three months are the best time to seal the deal. Here’s what experts say...india Updated: Apr 18, 2009 22:39 IST
A house for Mr Biswas will now cost less with markets correcting approximately 10-30 per cent in Delhi NCR, Mumbai, Bangalore and Chennai. The next three months, say real estate watchers, are the best time to close a deal.
Where property buying goes, the buzz is that it’s no longer the worst of times. For instance, real estate worth Rs 50 lakh six months ago, will now cost 40 lakh. And with interest rates down to 8 per cent from 13-14 per cent, what the consumer shells out effectively is Rs 32 lakh. In other words, this is the best time to buy.
Gurgaon based IT professional Raibat Mukherjee started his search for a house four months ago. He zeroed in on a project which was launched last month. It’s at a prime location, and comes for a good price. “With the Navratra discount, the house cost me Rs 26 lakh,” he says.
Deals like this are bringing realty back to life again. “This is the right time to do your research and consider buying a
house at the right and real price. Developers are more than willing to give in to the demands of a serious buyer,” says Pankaj Renjhen, managing director, North India at Jones Lang LaSalle Meghraj (JLLM).
Many who aren’t buying are window shopping. Average buyer interest over the last two months has risen to 30-40 per cent. Experts anticipate an upward trend in the market between May and July. With prices rationalising in many pockets across the country, the dream house is looking affordable for a significant corpus of aspiring buyers.
Those who have identified a suitable property and have the financial means to take the plunge should do so now. A deferred decision, say experts, might mean passing over the best bargains.
Developers are wooing customers like never before. “The buyers, chiefly end users are back into the market. There are realistic bookings happening today,” said Anshuman Magazine, chairman of real estate management and consulting firm CB Richard Ellis South Asia Pvt Ltd (CBRE).
Sachin Sandhir, MD and country head, Royal Institution of Chartered Surveyors (RICS), agrees. “Developers this season are seeing a lot of inquiries, the phones have started to ring again and that is very encouraging. With interest rates dropping enough to take a home loan and prices correcting by almost 10-30 per cent, it’s a good time to get back to the market.”
Even top developers DLF and Unitech who focus on luxury apartments are now coming up with affordable housing projects. Rita Dixit, executive director, Jaypee Greens, says that the prices have corrected by almost 30 per cent. Developers are tailoring products according to customer needs across all segments, instead of the earlier stress on high-end housing.
Moreover, as Kumar Gera, Chairman, Confederation of Real Estate Developers’ Association of India (CREDAI) points out, “Besides the interest rates and prices moving downwards, consumer fatigue has also set in. How long will a buyer wait? He may as well come forward and buy.”
The market is seeing a new movement because of the pent-up demand from end users — people who typically plan to buy a property for their children and see a future in real estate, says Aditi Vijaykar, executive director (residential services), Cushman & Wakefield. Those with a budget of Rs 20-30 lakh should seal the deal as any further correction is unlikely, points out Aditya Verma of Makaan.com, a property portal.
According to Chaitanya Manohar, director & COO, L.J. Hooker India, Bangalore, “We have seen increased level of activity (enquiries) across Bangalore specifically in projects that are close to completion (possession in 6-8 months). There has been tremendous interest especially in the Rs 20-45 lakh range from first-time homebuyers.”
Buyers today have plenty of choice; there are properties under construction for which possession is due in the next three to nine months. “He can expect reasonable returns as the market would be up and moving when he finally gets his house,” says Vineet Singh, head, residential, 99acres.com. As far as ready-to move-in properties are concerned, the costs are still high.
Another trend, especially in Bangalore, is that of ‘Silent Auction’ — the developers set a reserve price at which they are willing to settle. This is significantly lower than previously positioned in the market. Interested buyers put in sealed bids along with a deposit of Rs 1 lakh which will be set off against the purchase price on a successful bid.
So does that make it a bad time to sell? Well, perhaps. Rizwan, a senior manager with a job portal, recently sold his apartment in Faridabad for the same price at which he had bought it. “I had to dispose of the Faridabad house to take possession of my house in Indirapuram. The house cost me Rs 1,690 per sq ft two years ago. I did incur a loss in terms of the EMI and the foreclosure charges I had to pay the bank,” he said.
The market is not favouring the seller, but he can use it to his advantage. He may be able to sell his house to move to a better location or upgrade from a two-bedroom house to a three-bedroom at the same price. A person who bought property more than 3-4 years ago may make a profit if he sells now.