The property puzzle
There are lots of factors that go into each rise and dip in the price index, from the state of the job market to policy, legislation and the status of the region or micro market’s infra projects
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 Pankaj Kapoor, 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 buyerfriendly policies too,” says Aditya Kedia, managing director at Mumbai-based Transcon Developers.