As black money has been swept off from the real estate market, many of you must be still contemplating whether this is the right time to invest in a home or not? To be frank, for those people who had been sitting on the fence for quite some time, wondering which is the right time for buying their dream home, there is good news for them because this is the right time for such people to buy a house. Why? Well, go through the following reasons:
1) Reduction of cash component in a real estate transaction will encourage more genuine buyers in the market and the investors who are interested in simply investing their black money will be reduced.
2) As a result, there will a deflation in property prices. Some experts are expecting up to 30 percent drop in real estate prices in markets such as Delhi NCR.
3) However, as there has been less than expected sales of houses during the ongoing festive season, this could be another reason why discounts are anticipated in the market.
4) Interest rate cycle has now become conducive for housing loans. The interest rate has come off by over 125 bps since 2015. It is expected that the interest rate will drop further through the year.
5) The Real Estate (regulation and development) Act 2016 that aims to protect consumer rights and interests is providing greater transparency, higher penalties for delays and defaults. This, in turn, will lead to improvement of accountability of real estate developers.
6) Last but not the least, there has also been an inventory pile-up that is expected to provide a good choice for buyers.
For all these reasons affordability in Indian residential real estate is at a five-year high. There has been a year-on-year jump of 15 percent in home sales across top eight cities in the country to 78.2 million square feet in the quarter ended September, making it the best quarter in the past five years.
Moreover, according to the data gathered from Liases Foras, sales were dominated by the Mumbai Metropolitan Region and NCR. These sales have grown 39 percent in Mumbai Metropolitan Region and 11 percent in NCR, over the previous year.
For all these reasons, the real estate gurus are anticipating that this could just be the beginning of a healthy revival in demand for housing.