IS IT A GOOD TIME TO BUY PROPERTY?
ALTHOUGH INVESTORS ARE STAYING AWAY, FOR USER-BUYERS, THIS IS A GOOD TIME TO BUY
The real estate sector has been in a slump for some time now, and there are no signs yet of a revival. Investors have been shying away too, since their expectations of high returns in a short time are no longer being met. Nonetheless, there is a great deal of support among user-buyers, despite issues such as unsold property and delayed possession. Here is a roundup for those thinking of buying property:
INVENTORY OVERHANG
This is an estimate of how long it may take for all properties listed in a particular area to be sold (assuming there are no new listings in that time). Real estate advisor PropTiger estimated that in the last quarter of the last financial year, inventory overhang was 38 months. In the first quarter of this financial year, it reduced to 35 months. Experts say this could indicate a further improvement in the coming quarters.
PRICE OUTLOOK
Those who are looking to turn a quick profit should not invest in property; prices are expected to remain stagnant. For user-buyers, this is the time to buy: builders are offering discounts in the range of 10-15 per cent. Fence-sitters take note: there is unlikely to be a great fall in prices in the near future. Properties these days offer greater value for money than before: freebies like club memberships, parking and modular kitchens have become common. The upcoming festive season is likely to bring a slew of schemes and offers from builders and lenders to attract buyers.
LOAN RATES
Experts say that interest rates on home loans are as good as they’ll get for buyers. At the most, there could be a further cut of 0.25 percentage points. The central bank has cut its short-term lending rate by 1.5 percentage points since the beginning of 2015; but banks have transferred only about 0.7 percentage points to customers. Both loan rates and property prices are favourable for user-buyers just now.
REAL ESTATE ACT
The real estate sector has had many problems in the recent past, related to delayed projects and disputes between builders and buyers. The new Real Estate Act, 2016, addresses these problems through the formation of statelevel regulatory bodies and appellate tribunals. These mechanisms are required to be in place by April 30, 2017. State-level regulatory authorities will be required to decide on builder-buyer disputes within 60 days; appellate tribunals have another 60 days after that to address disputes over the authority’s decisions.