The real estate sector in India is going through one of its slowest growth pace right now and if it continues then the prices of homes are going to come down even more within a year. The sales of properties are at its all-time low and the piling up of unoccupied and unsold flats will further the fall in home prices. So, the dream to own your own home may not be that difficult in a few months apparently.
The heat of this slowdown is faced even by the investors due to the high capital costs while the rise of prices being too slow. A national property index of a renowned property portal reveals the growth of realty sector at a mere 1.7% annually since January 2013.
According to experts the situation is slated to remain similar or worse in the near future, especially on the residential segment. The recent trends of increasing discounts on residential properties and this so called distressed sales is only going to further the worries.
Reason for fall of prices
The fall in prices here however doesn’t mean some gross devaluation of about 30-40%, since such a fall is only triggered by economy recession. While the GDP growth of our country is at one of its fastest paces now. The prices may remain flat or there would be a marginal growth. For example in the NCR the property prices have risen by 1% in the last one year.
One of the important points to be noted is that, the snail pace of increase on ROI has dampened the investor sentiment. There are a plenty of investors who aren’t businessmen or professional investors, rather they are common men who have purchased second homes to rent or resale. The professional and long term investors can hold their grounds but the concern is about the short-termed ones who are already nervous. This nervousness lets them sell flats at rates lower than what is being offered by various builders.
Veiled discounts
Generally developers won’t cut down the rates and price lists on their brochures. The reason is that there are always a number of people who have booked flats and agreed to pay the rates mentioned in the brochures. So if at a later stage they openly declare discounts on the same properties then they are bound to irk their existing customers as well as lose their credibility. So discounts in disguise with various financing schemes are some of the plans developers are coming up with.
Waiting and watching
The slowing down of real estate is in effect getting the investors nervous and many prefer to wait and watch the course in which the market would proceed. This in turn is increasing the number of unsold
inventory of properties by many folds. The current slowdown will get corrected in about a couple of years now according to experts.
Suggestions to buyers
The price is already in a correction mode in the NCR although it is still not an eye catching figure. The experts now advice home buyers to go ahead while the market is in correction mode and prices are at their lowest. It’s a good idea to put your plans into action if you are potentially looking to buy a property.
What’s up in Bengaluru?
Bengaluru has seen the highest number of property project launches recently. Developers are too interested in Bengaluru due to its affordability, availability of land and comparatively lesser bureaucratic hurdles. Although buying properties as a method of investment may not seem like a good idea for many, but for your home you must certainly go ahead and own your home at a time when prices are at its lowest.
The heat of this slowdown is faced even by the investors due to the high capital costs while the rise of prices being too slow. A national property index of a renowned property portal reveals the growth of realty sector at a mere 1.7% annually since January 2013.
According to experts the situation is slated to remain similar or worse in the near future, especially on the residential segment. The recent trends of increasing discounts on residential properties and this so called distressed sales is only going to further the worries.
Reason for fall of prices
The fall in prices here however doesn’t mean some gross devaluation of about 30-40%, since such a fall is only triggered by economy recession. While the GDP growth of our country is at one of its fastest paces now. The prices may remain flat or there would be a marginal growth. For example in the NCR the property prices have risen by 1% in the last one year.
One of the important points to be noted is that, the snail pace of increase on ROI has dampened the investor sentiment. There are a plenty of investors who aren’t businessmen or professional investors, rather they are common men who have purchased second homes to rent or resale. The professional and long term investors can hold their grounds but the concern is about the short-termed ones who are already nervous. This nervousness lets them sell flats at rates lower than what is being offered by various builders.
Veiled discounts
Generally developers won’t cut down the rates and price lists on their brochures. The reason is that there are always a number of people who have booked flats and agreed to pay the rates mentioned in the brochures. So if at a later stage they openly declare discounts on the same properties then they are bound to irk their existing customers as well as lose their credibility. So discounts in disguise with various financing schemes are some of the plans developers are coming up with.
Waiting and watching
The slowing down of real estate is in effect getting the investors nervous and many prefer to wait and watch the course in which the market would proceed. This in turn is increasing the number of unsold
inventory of properties by many folds. The current slowdown will get corrected in about a couple of years now according to experts.
Suggestions to buyers
The price is already in a correction mode in the NCR although it is still not an eye catching figure. The experts now advice home buyers to go ahead while the market is in correction mode and prices are at their lowest. It’s a good idea to put your plans into action if you are potentially looking to buy a property.
What’s up in Bengaluru?
Bengaluru has seen the highest number of property project launches recently. Developers are too interested in Bengaluru due to its affordability, availability of land and comparatively lesser bureaucratic hurdles. Although buying properties as a method of investment may not seem like a good idea for many, but for your home you must certainly go ahead and own your home at a time when prices are at its lowest.
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