One question which I get asked quite often is the one this topic is about – Is this the right time to buy Indian Real Estate?
I guess the question has its own merit. Indian Real Estate has been and actually is going through a correction phase. Its not really as if the bubble bursted or the markets crashed, but more of a filtering of wheat (real buyers) from the chaff (speculators) thats been going on.
Not that I am any financial expert on the subject but from what I see and hear, Real Estate generally worldwide has a cyclical nature and Indian Real Estate is no different. It is currently going through a dip to prepare for its next high tide. Real estate as a product is fairly limited and there’s pentup demand of Real Estate – both in Residential as well as in Commerical sectors.
Having that said, the followup question is “So, how much of it has already been through?“.
Although India does not has national indexes to support my argument, but I see about 5-10% correction in different parts of the country already happened. Will that continue, probably. Is that happening across the board? Yes and No.
Yes- because the market took a turn from speculators to home buyers, from sellers to buyers and from unhealthy towards regaining health. This is really good for the industry. This was much needed and awaited. This resulted into a correction all over the country, some areas more significantly affected than the others.
No- because the effect hasn’t been on every property that is a part of the Indian real estate. Location, Location, Location are the three core factirs determining the demand as a result the price of any property. Due to limited nature of the product, certain areas, properties have a higher demand than others. So those “in-demand” areas or properties haven’t been affected much, or I can safely state – They are still appreciating North.
Finally the million dollar question asked is – “Is this a good time to buy?”
Now thats where I totally fail to help.
If you have any faith in Buffet investment principles (those who follow him) – join when the tide’s low i.e. YES this is a graet time to find good deals.
Generally/practically – I see most people not being able to gather the courage to invest at a time when markets go through correction. There’s a general dilemma of “what if the market goes further down?” and so the thought continues.
I wish only if someone knew the guaranteed answer to the question!
Gunjan Garg
http://www.atoneplace.com
P.S: feel free to chime in. I’d love to hear your thoughts on this topic. Thanks in advance -GG
