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
Mark Schwartz said
given the u.s. real estate market it makes sense to look elsewhere, except Bush has made our dollar worthless
nikhil said
HHmm well i can see everyone asking the same question everywhere…..well according to me forecasting future is called speculation. In real estate business forecasting on future prices and cashing on it is profitable and it can be risky too. Beginners have to take extra caution. Taking advice from other investors will also help minimize mistakes. Following tips can help you in going smoothly.
• If you are planning to invest and speculate for a higher price then you need to look around the neighborhood of the property you are investing in. Try to know if any development there could hike the value of the property in coming months.
• Think of buying the property only if you want to hold for an indefinite period.
• Plan prudently. Weigh the risk and calculate profits deducting all the taxes and fees that you would have to pay until the property is with you.
• Resist temptations of selling it early at the rise of prices. Also do not wait for highest price.
• If possible go for investing in distressed properties such as pre-foreclosure homes, or foreclosure homes, and so on.
• Try buying multiple properties that are cheap instead holding on to one and wait for the ripe time.
• Being a novice, do not go for pre-construction buying. Supposing the construction does not take place at all or is stopped half way through you would be in a quandary. Do not go for rumors in the market. Because at such times you may commit mistakes by selling good deals and keeping bad ones for bad times.
• Do not make the mistake of going on hunches. Speculate with your head rather with heart.
• Learn to take small losses for big gains in future.
• Don’t take big risk for small profit.
• Selling when the markets are inactive may prove a big loss. Go by the trend rather than blind speculation.
• Always be handy with finance. You may miss the opportunity of getting homes at reduced prices.
• When the markets are going against your prediction try not to ride on your emotions but plan with good defense.
• Don’t go on the stories because sometimes the market negates them.
• Money management will help you in the turbulent times.
Krish said
Hello,
I want to know whether you have an affiliate program.
Thanks
Krish
Condo said
Real Estate is a long term investment, no matter which country you buy in. If you don’t have the holding power do take too much risk. India will continue to grow faster than US or other developed countries and the value of its real estatewill grow at the same pace. Just my 2cents.
nancyarora2020 said
Many expect a further correction in home prices in India. Since the volumes of property transactions are going down, hence the asking price for property will also go down. Additionally, over-supply of property is posing as a major reason for the slow down in Real Estate prices.Recent media reports have also suggested the same trend. Reports suggest that Real Estate Prices in Mumbai, Bangalore, Pune, and National Capital Region have corrected 15-20% in the first quarter of this year. Market-watchers say that this trend will be repeated across the Tier II cities and suburbs too. No wonder property developers are wooing prospective users with all sorts of offers. Some are even offering lower EMIs for flats while some are offering goodies like cars along with property. Still others are wavering off the stamp duty prices.
Are the property prices coming down in your area? Is the property slow down really impacting the end user in a major way? Should the home seekers cheer for some reasons? Is there a possibility of a market dive? Or is this a temporary phase in the housing segment?For more view- realtydigest.blogspot.com