'Now is not a good time to invest in real estate'
Feb 27, 2014
Source : The Times of India
 
THANE: Even as Thane city is witnessing a spurt in the number of residential projects being launched by developers, property consultants and experts are, however, divided over whether this is the right time to invest.

''The city has always been an option for first time buyers who find it difficult to afford the high-prices that are on offer in Mumbai. Since the last 18 months, there has been an oversupply situation has developed in the market,'' said M Joshi, a local broker. "In addition to the new launches, the apex court's recent decision to clear homes on forest land has released nearly 10,000 flats that are either ready or under construction have come in the market

. So, here is a huge market for end-users but not for investors who are looking for returns of over 20% in the current market,'' Joshi added.

Going by the prices compiled by the real estate rating and research firm, Liases Foras, different pockets in the Mumbai Metropolitan Region (MMR) and extended suburbs delivered a compound annual growth rate ( CAGR) of 20% or more for investments made in 2005. Simply put, people who bought real estate assets have seen their money multiply anywhere between 3.7 to 4.9 times, depending on the market they invested in then.

Om Ahuja, chief executive officer, residential services, Jones Lang LaSalle India, feels that it is definitely possible to create wealth through real estate investment as long as one keeps the fundamentals in mind. ''Effective investment in residential property requires a location to meet certain parameters. Fundamentally, the area should have good social infrastructure, availability of adequate public transport and sufficient economic activity to sustain development and growth."

"The investor should keep an eye on the market and sell the residential property at the right time in order to multiply wealth. If all the above precautions have been taken, the property should have appreciated at a consistent rate of 15% per annum for three years," said Ahuja adding that it is important to remember that one can almost never sell at the peak, just as it is impossible to always catch the lowest price.
 

 

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