Realtors are still flexible with buyers’ demands
If you go by the indicators of price and sales, the property market in many cities could be headed for a revival. The Reserve Bank of India says housing prices on an average have increased 13.7 per cent in 10 major cities in the July-September 2015 quarter. Sales, too, have got a boost if one goes by brokers’ research reports.
Recently, when a reputed developer announced the pre-launch of its project, buyers lined up outside the office to book a flat. This happened despite the units being sold were at the market rate and the construction had not yet started.
“These do not necessarily mean the real estate market will witness a turnaround soon. The trend has to sustain for the next six months to call it a revival,” says Sanjay Dutt, managing director-India, Cushman & Wakefield.
He says there have been contradictions in the data. While there are launches where buyers are in a frenzy to buy, there are also developers in distress who are struggling to sell. “Office demand has picked up, which means more jobs are being created. If this sustains for the next two-three quarters, then it will be a turning point for the industry. At present, it’s premature to say so,” says Dutt.
If you are a buyer planning to buy a house to stay, then it’s a good time to purchase, say real estate experts. A S Sivaramakrishnan, head of residential services at CBRE South Asia, says smart buyers are already scouting for a property. In the current scenario, realtors are still flexible with buyers’ demands. This is also because of there’s a pile-up of inventory.
In Mumbai, 77,000 apartments remain unsold, according to JLL India. This will take almost 11-14 quarters to clear off against a healthy expected cycle of four-six quarters, says Ashwinder Raj Singh, CEO – residential services, JLL India. While developers might not increase prices if the sales pick up, they might not be flexible enough to accommodate buyers’ demands.
Other than checking the track record, approvals and titles, before making a purchase be sure the discounts, offers and schemes offered are not built into the price, cautions Mudassir Zaidi, national director, residential agency at Knight Frank.
Some developers will offer flexible payment option or attractive interest rates, but they sell houses at higher prices than the rates prevailing in the area. Don’t just go by the quoted rate of the flat, says Ashutosh Limaye, head of research at JLL India. Developer might offer lower priced, but add additional charges such as club house fee for amenities.
For those looking at under-construction flats, it’s a good idea to take sometime to evaluate the project, says Sivaramakrishnan. Ideally, the buyer should spend 30 to 60 days to visit the site and check if the construction is happening as promised. If there’s any deficit, it’s best to stay away.
“A buyer is likely to find a good deal if they look at old flats constructed five to 10 years ago. They will be 10-15 per cent bigger and save a whole lot of charges,” says Dutt. If you are looking at real estate investments, it’s better to wait and watch the trends and developments over the next two quarters. Only if there’s a clear indication of property market revival, should an investor plunge in. However, be prepared to stay invested for a long haul.
