Is this the right time to buy property? This is a common question asked by most buyers as real estate prices have been stagnant for the last two years. Homebuyers are becoming even more cautious with residential reports suggesting that there is an inventory overhang in almost all markets. Having said that, this is perhaps the best time to buy as it is a buyers’ market and they should make the most of it.
The market is flooded with offers and incentives from developers.The reduction in the number of launches and stagnant prices in the last couple of years demonstrate that the market is in self-recovery mode and timing could not be more opportune than now for end-users as well as long-term investors to buy now.
Not only this, market forces have nudged the residential sector on the road to recovery. In fact, in cities such as Pune, Bengaluru, and Navi Mumbai, residential sales velocity has been on the upswing as evident from the last couple of quarters.
Beside this, there are other reasons why it makes sense to buy now. In the last two years, the office sector has also seen growth. The IT/ITeS, e-commerce, FMCG and BFSI seem to be in an expansion mode.This has not only created jobs but also a level playing field for future residential capital and rental value appreciation.
Additionally, it would not be wrong to state that the past few months have made home buying relatively cheaper. Lowering of interest rates on bank loans has bought the vigour back in the sector. Currently, the home loan rates are in single digits and at an all-time low. From the end-users’ perspective, it means lower monthly EMIs and lesser interest burden.
Moreover, to bridge the gap between affordability and residential demand for quality homes, some banks have recently introduced new home loan schemes offering flexibility in interest moratorium and principal repayments.
Unlike before, such schemes are targeted at urban young working professionals who have both the appetite for home ownership and repayment capacity.
Lastly, the options are aplenty, even for ready-to-move in apartments. The countrywide slump in residential sales, high-unsold inventory, and liquidity crunch has prompted property developers to introduce aggressive marketing tactics. With the festive season currently on, developers are offering modular kitchens , air-conditioners, international holidays construction-linked plans, no-EMIs-until- possession schemes, flash sales and cash discounts to buyers to tempt them to invest in their projects.
Though end-users have been waiting patiently for a price correction to take place in the realty market due to an oversupply, prices have already bottomed out in most of the cities. Improvement in macroeconomic sentiments coupled with better job prospects have started bringing in returns for the commercial sector and it is only a matter of time before the residential sector revives too.
Investors too have started pumping funds into the residential sector due to the relaxed foreign direct investment norms in the construction sector.
Some developers in cities such as Bengaluru, Hyderabad, Pune and Chennai have already received funding for future supply pipeline.
In view of the controlled inflation, decreasing interest rates on home loans coupled with tax benefits, this may just prove to be the right timing for buying a home for self-use. Investors with long-term investment plans can also gain by driving a hard bargain.
The author is senior associate director, Colliers International