[ecis2016.org] It’s unlikely that the real estate market will receive a huge price correction despite certain media reports. Home buyers should continue to exercise due caution and purchase the right property, in the right location, at a price point that works for them
Most home buyers are concerned about the right time to make an investment and whether the realty market is set for a correction in rates. The global economic market has witnessed lots of ups and downs with China devaluing the currency. Additionally, our domestic market had been choked by the policy paralysis which plagued many legislations in the parliament, in the past. Home buyers and investors are hopeful that the interest rate cut of 50 bps by the RBI would revive the market sentiment in the coming days.
You are reading: Should you buy a house now or wait for a price correction?
“Although the Central Bank did implement monetary easing during the first half of the year, the actual impact on mortgage rates has been far less. However, going forward, further measures of monetary easing and reduction in mortgage rates can have a positive impact on housing sales across the country,” said AS Sivaramakrishnan, head – Residential Services India, CBRE South Asia Pvt. Ltd.
Are property prices heading for a crash?
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There are concerns about the realty market heading for a crash. However, can the realty market crash in a single day, like the stock market?
[ecis2016.org] Price correction for resale flats indicated by secondary markets
Price corrections do not happen the way most people imagine, if they happen at all. “Many people think that property price correct uniformly and simultaneously across locations; which is not the case. Property price correction may take place city-wise or in a particular city,” points out Arvind Jain, managing director, Pride Group. “More importantly, in locations where there is too much stock and no sales; if sales are taking place, even at a slower rate, prices will not drop. This is, in fact, one of the main reasons why investment in the right property at the right location, is such a safe bet.”
Property price trend
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According to a CBRE report ‘India Residential MarketView – H1 2015’, pricing trends in the residential real estate market remained diverse, varying across segments and neighbourhoods of leading cities. Home prices remained largely stable in the premium, and high and mid-end segments of Mumbai, Chennai and Kolkata; while Bengaluru saw a price rise due to a marginal increase in housing demand.
Should you wait to buy a home?
Experts suggest that end-users should strike a right deal on the basis of location and amenities. Home buyers must exercise price negotiation when investing, but waiting for a big correction may not be fruitful. The current real estate sales trend, opens up a larger window of opportunity for buyers. The demand for properties has been low in the past three quarters. Especially during the lull period of the monsoons, sellers are eager to accommodate serious customers. In fact, property sales in 2015 are likely to continue their journey along the lower end of the graph, till the end of the holiday season.
“The rate of discount varies, depending upon the location and how badly it has been affected by the rains,” explains Kishor Pate, CMD – Amit Enterprises Housing Ltd. “Discounts on regular prices in cities like Kolkata (among the worst-affected) are likely to be more than in Chennai or Delhi. Even in top cities like Mumbai, home buyers can expect a discount between 10 to 20%.”
Source: https://ecis2016.org/.
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