Good time to buy a home: Analysts

Good time to buy a home: Analysts

By SHAILENDRA TYAGI | NEW DELHI | 6 February, 2016
Home buyers should take advantage of the especially low residential real estate prices to buy a home in 2016.
Developers eager to sell their unsold inventories of homes are offering hefty discounts to anyone approaching them with a cheque book.
Genuine home buyers should take advantage of the bottomed-out prices of residential real estate and should start buying their dream home now as prices would start moving up from mid-2017. Pro-activeness shown by the government in 2015 — like relaxation of FDI rules in residential real estate, expected passage of real estate bill in the budget session, implementation of the seventh pay commission recommendations and actualisation of initiatives like smart cities and housing for all by 2022 — are all going to rejuvenate the residential real estate in a very big way. “So, the fence-sitters waiting for prices to come down further would be missing the boat now,” says Ashwinder Raj Singh, CEO, residential services, Jones Lang LaSalle-India.
With speculation — more or less — out of the residential segment, it has become an end-user market now with returns becoming more aligned to actual market forces than the speculative ones. So, every developer eager to sell their unsold inventories of homes is offering hefty discounts to any one approaching them with a cheque book. “A house bought now (at lower prices) would surely provide significant capital appreciation going forward,” adds Singh. Delhi, Gurgaon and Noida have one of the highest unsold inventories among the major metro cities of India. Singh, however, cautions buyers to seek expert advice for checking the background of the developer as well as the developer’s capacity for timely delivery of the project.
The reduction of home loan interest rates from the prevailing 10.5% to 9% can really turn around the residential sector with a huge demand emanating from potential homebuyers. The passage of the real estate bill is also expected to bridge the trust deficit between the end-customers and the developers. The bill is also likely to make transaction more transparent with penalty attached for every deviation. Singh says that big players in the real estate sector are very positive about the bill and many have already started implementing the fine prints of the bill to be seen as more customers centric.
Many expect that the announcement made in the forthcoming budget like, “favourable changes in direct and indirect taxation on individuals, as well as direct incentives related to property purchase, can infuse many fence-sitters with increased financial confidence to buy a house,” says Arvind Jain, MD, the Pride Group. If the Finance Ministry raises the individual income tax exemption limit, it will have a positive impact on the long-term spending and saving patterns. “More disposable income increases investment appetite, and property is the foremost investment instrument of choice for every Indian”. 
 

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