Go for your dream home now! this is a good time as any other
Given the softness in home prices and loans available at reasonable rates, the question is whether buyers should take the plunge and buy their dream house or should they should wait for a while.
Given the softness in home prices and loans available at reasonable rates, the question is whether buyers should take the plunge and buy their dream house or should they should wait for a while.
The RBI’s decision to keep interest rates unchanged has disappointed property developers already grappling with sluggish demand for the last few years. To make matters worse, demonetization has further slowed down transactions because of the shortage of currency notes. Cash forms a major chunk of property deals, comprising anywhere between 10-40 percent of the property value.
Buyers are in a wait-and-watch mode, hoping for prices to fall further. The builder community, which was hoping for a rate cut, was disappointed at RBI’s decision with Credai, the developers association terming it “unfortunate”.
Given the softness in home prices and loans available at reasonable rates, the question is whether buyers should take the plunge and buy their dream house or should they should wait for a while.
Real estate experts feel those looking to buy a house should go ahead with their plans.
Santhosh Kumar, CEO – Operations & International Director, JLL India feels this is the “best time” to buy.
“Due to correction, residential property rates in the primary sales segment have reached their lowest point now and cannot go any lower.
Demonetisation has also put downward pressure on property prices in the resale homes segment. All things considered, this is the best of times for buyers to make their move,” Santosh Kumar told Moneycontrol.com.
Kumar says price corrections are likely, but the extent of correction may be segment specific.
“In the primary sales segment, smaller developers may go in for further rate cuts to boost demand. We may see such price reductions happening more in tier 2 and tier 3 cities,” he said.
While no exact figures are available on price correction, it is estimated that post-demonetisation, home prices have corrected by up to 20-30 per cent. “
“The realty sector is a clear loser due to demonetisation announcement of currencies. Several commentators have forecast a drop of 20-30% in apartment prices,” G T Kannan Founder & CEO, elEVAte Business Solutions said.
JLL’s Kumar says interest rate should not play a big role in home-buying decision.
“In the larger cities where high property prices themselves have been a hindrance, interest rates may not play much of a role in property buying decisions. Buyers should evaluate the benefit of a possible rate cut in terms of actual savings on their EMIs and decide on whether it is worth waiting for lower interest rates, or whether it makes sense to act now,” he said.
- by Sarbajeet K Sen
Source : Moneycontrol.com
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