Is it the right time to buy property as an investment?

Many Indian investors consider buying property as a safe bet. The real estate market, however, is speculative like many other markets and involves both boom and bear periods. While many Indian investors made money during the boom period, others made a decent return over a long term or exited the sector during the correction phase. The residential sector is still in a price discovery phase and one cannot expect huge returns as they did in the past.
The current market scenario is not like the earlier one when the Indian investors minted money and then exited the market with better returns. “The residential sector has been going through a correction phase with plummeting sales and hardly any significant improvement that could force a buyer to invest in the market in order to reap better returns. However, this is the opportune time for fence-sitters who are looking to purchase a piece of property as they can get better options and good deals from developers. Buyers, therefore, should not delay their decision as one can negotiate prices both in primary and secondary markets,” says Avnish Yadav, Deputy General Manager, Residential Services, Colliers International India.
The end buyer should take advantage of the current turmoil in the market and drive a hard bargain from developers. Developers are also offering various flexible pricing and payment plans to lure buyers. However, “one should conduct due diligence before investing in a piece of property to fetch better returns in the future. It definitely makes sense for fence sitters to purchase their dream homes in today’s market, but one should buy the right product at the right price,” says Yadav.
While the Indian market has been witnessing slowdown, the developed markets have been growing in double digits. However, there is immense potential in the Indian market as new reform measures such as RERA and Housing for All by 2022, introduced by the Modi government, will bring transparency and boost the sector. The market will now be more regulated with higher investment opportunity from PEs and investors.
True, “one cannot expect inorganic growth rate as witnessed in the past, but the market will give decent returns, if one has the potential to hold the property for a long term. However, if one is an aggressive investor and decides to buy a piece of property, he should invest in under-construction projects by reputed developers as discounts have gone up significantly. These investors should also conduct in-depth market research across cities in order to identify hotspot corridors for investment and returns,” informs Yadav.
Also, as investing in a home is a deal of a life-time, one should buy property in branded real estate projects and keep an eye on the prices while entering and exiting the market. The developer’s compliance with RERA is another important factor to look for.
Anuj Puri, Chairman, JLL Residential, says, “Considering that residential prices are at their lowest right now, and also factoring in that developers are generally open to negotiate further and are offering attractive schemes usually only seen during the festive season, it is definitely a very good time to invest in a home. That said, buyers of under-construction properties should have reason to be completely confident about the developer’s willingness and ability to comply with RERA. This calls for fairly comprehensive due diligence which, in addition to the usual documentation one should ask to see, would include proof that the developer has applied for the project’s registration under RERA.”

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