Mat­ters of re­alty rate

Elections, jobs, per­cep­tion, aban­doned large projects — there are a lot more fac­tors that de­ter­mine the cost of prop­erty prices in an area than de­mand and sup­ply, ex­plain ex­perts

Hindustan Times (Chandigarh) - Estates - - ESTATES - Lav­ina Mulchan­dani lav­ina.mulchan­dani@htlive.com

De­mand and sup­ply are cru­cial fac­tors, but what else goes into the rise and fall of prop­erty prices? “In some ways it is sim­i­lar to the stock mar­ket, though far less volatile,” says Mu­das­sir Zaidi, na­tional di­rec­tor for res­i­den­tial re­alty at con­sul­tancy Knight Frank In­dia. “There is sen­ti­ment in­volved, and you have to make a de­ci­sion based on your own ex­pe­ri­ence and re­search. You can never pre­dict if wait­ing will help, be­cause there is no way to say if prices will rise, fall or re­main the same in the short term.”

Per­cep­tion means that brand­ing, cred­i­bil­ity and past per­for­mance be­come key in­di­ca­tors for spe­cific projects as well as mi­cro mar­kets, re­gional mar­kets and over­all in­dus­try ex­pec­ta­tions.

In terms of more brick and mor­tar fac­tors, ups and dips in prices also re­sult from the progress of planned in­fra­struc­ture, new reg­u­la­tions, levies, nat­u­ral dis­as­ters, even time of year.

POL­ICY MAT­TERS

“For in­stance, if a par­tic­u­lar in­fra­struc­ture plan is shelved, prices of homes in those mar­kets could be af­fected,” says Shveta Jain, a man­ag­ing di­rec­tor at re­alty ad­vi­sory Cush­man and Wake­field In­dia.

Prices typ­i­cally drop when re­alty-re­lated reg­u­la­tions are passed, says Anuj Puri, chair­man at Anarock Prop­erty Con­sul­tants. “The pass­ing of the Real Es­tate Regulation and De­vel­op­ment Ac­tor or RERA and the Goods and Ser­vices Tax con­tinue to im­pact sales and rates, be­cause peo­ple go into wait-and-watch mode.”

Per­cep­tion of the de­vel­oper and the lo­ca­tion play a key role. “The buzz around real-es­tate in Mum­bai and Delhi, for in­stance,” says Amit Wad­hwani, man­ag­ing di­rec­tor at bro­ker­age firm Sai Es­tate Con­sul­tants. “Job mar­kets grow­ing and shrink­ing can also lead to a change in prices.”

That helped and con­tin­ues to help Ben­galuru, and is now pos­i­tively af­fect­ing Hy­der­abad.

“Hy­der­abad is be­ing per­ceived as a city of­fer­ing bet­ter em­ploy­ment and hous­ing op­por­tu­ni­ties ,” says Panka­jKa poor, CEO of real-es­tate con­sul­tancy Li­ases Fo­ras.

“This is partly be­cause the gov­ern­ment of Te­lan­gana is work­ing to cre­ate a busi­ness­friendly en­vi­ron­ment with poli­cies such as Te­lan­gana State In­dus­trial Project Ap­proval and Self-Cer­ti­fi­ca­tion Sys­tem [a sin­gle-win­dow clear­ance sys­tem for in­dus­tries]. The in­fra­struc­ture is also de­vel­op­ing fast lead­ing to bet­ter qual­ity of life. So you be­gin to think of it as a place with bet­ter homes at af­ford­able prices.”

Fes­tive sea­son brings more buy­ers to the mar­ket, says Zaidi of Knight Frank.

A change in gov­ern­ment of­ten causes a short-term dip. “Sev­eral buy­ers are wait­ing for 2019 elections to make a buy­ing de­ci­sion. They ex­pect the gov­ern­ment to im­ple­ment buyer-friendly poli­cies too,” says Aditya Ke­dia, man­ag­ing di­rec­tor at Mum­bai-based Transcon De­vel­op­ers.

Hy­der­abad is be­ing per­ceived as a city of­fer­ing bet­ter em­ploy­ment and hous­ing op­por­tu­ni­ties. This The in­fra­struc­ture is also de­vel­op­ing fast lead­ing to bet­ter qual­ity of life. So you be­gin to think of it as a place with bet­ter homes at af­ford­able prices.

Pankaj Kapoor, CEO of real-es­tate con­sul­tancy Li­ases Fo­ras.

GETTY IM­AGES/ISTOCKPHOTO

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