Take a Reality Check before Buying a House

According to a recent report from property consultancy firm Knight Frank, it has been stated that real estate prices in certain Mumbai areas have come down by 10%. The report also states that nearly 45% of the new properties that are coming up in Mumbai are unsold.

According to real estate consultants, the situation is not any different in other cities too where prices have softened. The question that props up in the mind of the people is that whether it is the right time to invest in real estate.

According to national director, residential agency, Knight Frank India, he states that it is a good time for investing in property. Owing to the uncertain economic scenario and political situation, the prices are submissive across cities. These are considered to be the two macro factors which influence property prices.

He further states that post-elections in mid-2014, in case a stable government comes to power at the Centre, prices might shoot up due to improved confidence levels. However, in the event of a fractured mandate, the reverse might also be true. He added that it is a short-term trend wherein presently there is pressure on prices.

An executive from Cushman & Wakefield states that from an investment point of view, if some of the fundamentals like job or business security, financing options, etc are in place for an individual, then this might be considered to be a good time for real estate investments.

The report further states that, the fact that real estate prices are showing signs of weakening is indicative of the fact that the long-standing stalemate between buyers and builders is finally turning in favor of buyers.

It is advisable that by taking into account various factors, one must make an investment in real estate. To start with, one must be convinced about the potential of the location. Other key factors are existing and upcoming infrastructure developments and access to prime locations of the city.

Apart from this, the area must also have social infrastructure, which is necessary for attracting tenants. Proximity to places of work, colleges in the neighbourhood and quality of schools, entertainment and healthcare facilities, retail malls and other amenities are something that people usually look out for.

In case it happens to be a suburban location, it must have unabated access to the main city locations. Moreover, one must check for infrastructure development plans which are announced or the ongoing development projects. The chosen location must also have a development authority to make sure future development prospects.

Bangalore Real Estate Is On a Positive Note

It has been noticed that the Bangalore’s real estate market is on a positive note as the new government has gained stability and is looking forward to address some problems of the previous one. The interest rates too have fallen. What is making it more attractive is the fact that the property prices have been comparatively steady in the last past few.

According to a senior executive of a renowned realty firm, the mood among investors is positive. He also stated that good infrastructure and governance played a crucial role in the building Brand Bangalore. Moreover, the quality must be maintained in the ongoing projects and they must be completed on time.

With the rupee weakening, builders opine that Bangalore is attracting huge foreign buyers. In terms of foreign currency, a weaker rupee made Indian goods cheaper. According to an executive from a renowned realty firm, this was the ideal time to invest in Bangalore by foreign investors.

Besides, the home loan interest rates which had gone up to 11% and higher are currently down by around 10%. With the inflation rate dropping, the bankers are expecting the tendency to continue. Since most buyers take large loans to finance their property purchases, interest rates play a crucial role in real estate.

According to another executive from a renowned realty firm, what is helping bring buyers into the market is that systems like wherein the builder takes the ownership of the customer's EMI until the project is complete. What is keeping prices stable in Bangalore is that Bangalore is known to be an end-user market instead of a speculative one, according to him.

However, there seem to be major concerns about the job market. Though IT companies are not creating many jobs as they were doing earlier, still this is not an instant fear.

In this scenario, the realtors are looking forward to the latter half of 2013. This would be the time when the Rehabilitation and Resettlement Bill, and Real Estate Regulatory Bill and the Land Acquisition, are likely to be passed. In case the "The Real Estate Regulatory Bill, is passed, this will help in the growth of the country’s realty section. It would also give rise to a healthy business and erase all the unethical operators.