The Right Time To Buy Is Now!

Property markets across the globe are prone to speculations about prices that will rise, fall, or remain stable.  But in reality, the early bird gets the worm. Similarly, real estate favours those who have read the trends and have invested early on in the cycle. When infrastructure builds up in a particular locality, prices surge and settlements double, encouraging jobs, businesses and workforce, doubling up the demand.  However, given that real estate is policy and money bound, potential investors wait and watch before they trust all's well. A long wait can even hit one's confidence as he gets so used to the wait that they may not step down the fence unless they see very clear signs of recovery or profit. In real estate, such fine clarity may be unheard of. Experts say, buyers should not wait in anticipation.

If you are waiting to make an investment and have found the right property, the good news is that over the last two years, the markets have more or less corrected. Prices have not scaled up beyond one-two per cent, and that is negligible when it comes to real estate.

Industry insiders believe there is no 'good time' to invest. There are often a set of positives and downsides to watch out for at any given moment of time. For example, if you are keen on a property purchase now, you get to reap the benefits of a discounted market. Second, while the momentum picks up and is visible in the rental market, who would want to pay high rents and not buy a home?

Invest to earn

Take the case of these localities in Chennai. RA Puram, Mylapore and Nungambakkam, home to some of the branded residences and wealthy names, recently registered a slight increase in rental values. Prices can vary from anywhere between Rs 15,000 – Rs 90,000 per month, depending upon the size, make, quality of construction, amenities and location of the house.

Karthikeyan Jaykumar, a local broker says, “I had clients who put their homes on rent because it wasn't moving in the resale market. This is a good time to invest in rental properties since the rental market has fared better. Prospective buyers, too, postponed their plans of closing on a transaction and decided to wait. Businessmen from Madurai and Coimbatore who had to make frequent trips to the city also formed one set of tenants.”

 Prices may increase, now is the time

Those on ground point out that in the next six to eight months, property market would garner momentum. While the rental market has already picked up, capital market is also heading towards better times.

“Buyers have taken the cue and have started putting in their money expecting a price rise in the future owing to regulatory changes. Some of my clients are setting out for an investment that could garner good rents. It is a good time to buy in the face of a discounted market,” says K Balaji of AV Balaji Constructions. Although not all buyers have shown their faith in the market, there is no dearth of those who have actively entered the market.

Consider favourable locations

Even in Bengaluru, locations such as Whitefield, Sarjapur Road, Electronic City, Marathahali, HSR Layout, Hebbal, Bannerghatta, Rajajaeshwari Nagar, Indira Nagar and Koramangala have been the choicest pick. The newer areas have attracted much of the young population solely for an investment perspective. However, end-users still rush to the established areas in search of better civic amenities such as water supply, electricity, physical infrastructure and capital appreciation prospects.

With the exception of locations such as Koramangala and Hebbal, capital values in the aforementioned areas are in the average range of Rs 3,700-5,500 per sq ft. For the money you put in, you could benefit from the rental returns which is anywhere in the range of Rs 8,000-35,000 monthly for 2, 3BHK flats. However, make sure your investment does not lose out on connectivity. This is because most home buyers are looking for easy commute to workplaces and to their wards' schools.

End user vs investor

Rajesh Sundaram of Balakrishna Estates says, “Smaller units were the most demanded till some months back and larger 2and 3BHK units were sought after by young professionals who were looking for a way to invest small but efficient. However, we are seeing end-users gathering the confidence in the market or perhaps they are wary of waiting any further in the name of price correction which builders couldn't opt for anyway because of construction costs etc.”

Buyers are picky and an end-user has his own priorities. For example, buying a house that suits your family size and budget is a consideration. Just because investors are looking for small houses because such units move faster in the market wouldn't comply with an end-user's ideology.

Besides, a slow-moving market has other benefits, too.

Invest because you can negotiate 

It is a buyer's market and most developers are also open for a five-seven per cent negotiation unlike in the active market scenario where the focus shifts on the builders and it is a seller's market.

Quality sells in a slow market 

In a sellers' market, anything sells. But in a slow market, most buyers are cautious of their choices and an attempt is made to judge a project by its quality. Buying a property is not a day's decision. While you may choose to invest wisely, most people do not postpone their decision. At most, they wait for good deals.