Now that the BER months have started, the Festive Season is now around the corner. With this comes the barrage of real-estate discounts and offers to attract customers into buying a house or real-estate property. But is it really a good time to invest in real estate during the festive season? Let's hear what the experts have to say.
The Divided Views
Rahul Agarwal of Wealth Discovery says that if you're planning on buying your first home this festive season to accomplish your dream of having a house, then he claims it is the perfect time to buy. According to him, home-buyers can take advantage of the discounted rates since most builders like to offload their stock during the festive months.
However, it’ll be a different story if you’re looking to buy real estate as an investment asset.
According to the real-estate experts, there are complications and confusions the real-estate sector has to clear up when it comes to investments.
According to Agarwal, buying real estate as part of your investment, the asset simply doesn't make sense. He claims that there is still a huge inventory build-up that the real-estate sector has to clear first before determining the right prices for the properties.
Moreover, you still need to study the trends and wait for a long time before your prices go up to get ROI. He said it was better for first-time home-buyers to buy real estate on ready to move-in houses compared to ongoing projects, which will be delivered at a later date, and the chances of cancellation are high.
A Slow Trend
Agarwal also says that while there's some positive movement projected in the real-estate sector this year, the property's prices are still not enough for the investors, especially in the metropolitan areas. According to him, the price trends of real-estate properties in metros and urban areas remain sluggish. In fact, even Delhi NCR, Pune, and Mumbai still charter in the negative territory.
According to real-estate experts, the demand in the real-estate sector diminished because of the two major recent events that happened in India.
Agarwal also adds that the enactment of RERA last may 2016, also known as the Real Estate Regulation and Development, as well as the government for last 2017 has dampened the real-estate industry. While the sector can still benefit from the said movements in the long-run, Agarwal reiterates that real-estate companies nowadays struggle to meet their short-term financial goals due to its negative impact.
The Rising Rates
Meanwhile, Parikh of Bajaj Capital says he's also not positive about the real estate sector in the next coming years. According to him, because the mortgage rates are to increase, generally the customers wouldn't invest in buying a house due to the rates. Aside from the limited housing availability, inflation also continues to rise, which makes it harder for customers to buy a house.
Meanwhile, the and RERA also brought a heavy blow to the developers who were leveraged and the tight real-estate market competition makes it hard for prices to increase. While the steady prices are good news to end users and buyers, it's not for the investors, unless they are planning to hold on to their properties in the long-term until the industry copes up.
If not, the investor must have at least the ability to select projects from developers with a track record of timely delivery and low leverage to get their ROI.
For Homebuyers
According to Adjmera, the Festive Season is the best time for homebuyers to scout for their dream houses since the offers are minimal. Aside from that, they also have extra bonuses which increase their purchasing power.
Dhaval Ajmera of the Ajmera Group, however, says the festive season is the perfect time for home-buyers and end users to take advantage of the discounted home loan rates. According to him, these offers are fairly unique compared to the deals you can get the rest of the year.
According to him, the RERA and GST rates have also been adjusted to entice customers into buying a house during the festive season. It also boosts the consumer's confidence in buying their own homes.