The realty sector is going through a tough phase. The times are more difficult for developers and builders compared to buyers as the demand for new homes has gone cold and several projects have slowed down. This has tilted the scales in favour of home buyers; it is a good time for you to negotiate and get a great price.
We present a snapshot of the current situation.
Lack of Interest Due to Surge Pricing
The demand for luxury properties and better services made developers increase their prices. But unrealistic pricing and surge in rates in certain sectors made buyers step back and defer buying their dream homes. The other reasons for the lack of interest include:
- Projects not completed on time. Stagnant or slow progress of buildings under construction has made buyers pay more on EMIs. This is hurting the budgets for families with fixed income.
- Few developers have taken steps to make their projects affordable.
- Land inventory across the country shows that not only Bangalore but other major metros also face the same problem of unsold inventory.
- Lack of liquid cash has also stopped buyers in their tracks.
- Capital values are rising. This is making people uncomfortable.
Good Times For Buyers
The new government regulation that punishes builders for not completing projects on time will make builders more accountable. And this is going to make NRIs who seek to invest in homes very happy. The factors that will make first time buyers happy include:
- The law to make builders accountable is now in place. The sector is now more organised from the buyer’s viewpoint.
- Online buying is real now. The current method of using the Internet to reach buyers is quite time saving. Many developers are tying up with portals to sell their properties. This ensures transparency. Digital platforms such as Facebook, Snapdeal and Housing.com are helping buyers to find houses.
- Interest rate cut by RBI is a relief. This augurs well for tier II and III towns across India. The repo rate has fallen to 125 basis points. The banks will now be forced to pass this on to the benefit of their loan seekers. Buyers are waiting for the home loan rates (of interest) to be reduced.
Investor or End User
If you are buying a house as an investment, wait till the end of 2017. But if you want one to live in, 2016 still presents good opportunities. Why? It is simply because you are in a position to bargain with the developer. With so many unsold inventories, you have a wide choice. In any case, many developers are also offering discounts to attract more buyers. A few are even advertising that along with the key to the home, you can also win prizes like gold, cars or electronic goods. So, if you plan to be an end user, it’s a pretty good time to get your dream home.