Is it the right time to invest in real estate market?

Is it the right time to invest in real estate market?

Is it the right time to invest in real estate market?

Real estate is the preferred avenue of investment for consumers with disposable income. Market conditions notwithstanding, Indian investors believe it to be wise and safe to invest in a home. Home buyers are always contemplating  when, how much and where they should invest in a property.

The fundamental question on most people’s mind is: ‘Is it the right time to invest in the real estate market?’ Though the answer is in the affirmative, certain influential factors come into play. In a constantly fluctuating market, consumers need to be cautious about where they are putting their money, and ensure that the investment is beneficial to them.

Buying a home made easier

Housing units are far more affordable than they were a couple of years ago. Home loan rates are low today thanks to the Reserve Bank of India’s repo rate cut. Not only is the government making life easier for buyers and catalysing the market, banks and developers have taken steps to attract increasingly cautious investors. End users who have been sitting on the fence, and waiting for prices to drop further, the RERA Bill comes like a breath of fresh air. The bill proposes to bring about additional accountability in the real estate industry.

Affordable housing has also seen a boost thanks to the Housing for all by 2022 focus proposed as part of the Union Budget, in addition to the civic authorities stepping in to place system to make home buying simpler. The Centre’s Smart Cities Mission, under which it plans to redevelop 100 cities, will also fuel more positive energy into the real estate sector.  It might be a good time now to invest in real estate since the sector is set to see a boom with all these new initiatives from all quarters.

Location! Location! Location!

Location forms a very important consideration when buying a home. An ideal location to buy a property is one that provides accessibility to transit and amenities.

Metro cities, tier II and III towns and peripheral localities are considered leading markets for real estate investments. Home buyers stand to gain if they buy property in suburban areas of big cities. Factors such as good transport links and connectivity to a city’s central business and commercial district have escalated the value of real estate. Growth of micro markets has developed sub-cities such as Bengaluru’s Electronic City and Gurgaon near Delhi.

Investing in these areas gives leverage to buyers as they have their share of businesses, markets, shopping complexes, retail outlets and other necessary infrastructure that benefits residents. Social, economic and infrastructural development in tier II cities such as Pune and Bhubaneswar is giving an impetus to real estate activity, thereby making them favourable for investments. In peripheral towns such as Kalyan-Bhiwandi, Badlapur, Dombivali, Thane and Virar, there is an increased activity of affordable and quality lifestyle projects. The affordability element makes these areas profitable for real estate investment.

Branded real estate wins

An interesting trend has emerged -- consumers who buy property in branded real estate projects are more likely to get higher resale values compared with those who opt for non-branded developers. Branded properties follow all the possible features such as strategic location with accessibility to key surrounding areas and facilities. One is also assured of signing up for premium amenities on the property.

The biggest advantage of investing in a home developed by a branded real estate company, is the surety of timely possession and thorough paperwork. Consumers are not burdened with the uncertainty of being tangled in a non-reliable deal. Many a real estate brands are also offering Ready to Move in flats, a concept which in this day and age of instant gratification is a boon for consumers. Receiving ready-made flats, gives the home buyer a tangible view of the promised features both inside and within the premises of the property, along with minimal fuss required to move in.  

Good time to buy second homes

It is also a good time to buy a second home purely for investment purpose or even a vacation home, which is a privilege for many. If you invest in property in popular destinations such as Goa, Lonavla or Kasauli, then you stand to gain from the associated perks that branded projects offer. Nowadays, young couples with disposable incomes are looking to invest in second homes. Vacation or second homes provide ideal rental income opportunities and also becomes a long-term asset as its value increases over time.

Investing in a home is a deal of a life-time. Certain elements that need your attention before you sign on the dotted line are approval and licences for the project, list of banks financing it, authenticity of the developer, size of the apartment, discrepancies in layout, or site plans, and registration of the plot. While you have all the checks and balances in place for investing in real estate, it might be  good to be mindful of the fact that the drop in prices and sales has been contained in the past couple of months but bound to see an increasing upward trend. 
(The writer is AVP Marketing at Tata Housing)