PUNE: The real estate market is gradually maturing in India and therefore, it elegantly overcomes all the challenges. After the economic slowdown and a series of setbacks, the realty market has been bifurcated into two parts i.e. the realty market from the perspective of investors, and from the standpoint of end-users. Experts believe that the current realty market of Mumbai and Pune, are to remain subdued from the investors’ point of view but if you are an end-user, then this can be a good chance to get your dream home at a good discount. There are various factors that impact the buying decision of an investor, such as interest rates, the location choice, brand, price, etc., but an end-user has concentrated buying dynamics and he/she focuses on the right price, the right place and a comprehensive package, for a good lifestyle.
Outlook of the realty market in Mumbai and Pune for end-users
Mumbai is the financial capital of India and therefore, people are continuously settling down here despite the price rise. Similarly, Pune is the hub of education and IT, therefore, demand from end-users is persistent. Rahul Sabharwal, COO, VBHC, explains that “Mumbai has traditionally been the metropolis which sees a continuous stream of people coming in and wanting to settle down. Both, Mumbai and Pune, offer great opportunities for developers to create housing for potential home buyers and office spaces for new age professionals, corporates and business communities. The Mumbai-Pune stretch offers maximum value – for-money due to its close connectivity to the twin cities.” There are many offers and discounts available in the market but there is still scope for more negotiations and discounts. Developers and resellers, both, want to relieve the property in stock. It is important to understand the market’s trend and compare the offers.
Asit Koticha, promoter, Pashmina Developers, feels that “A lot of freebies are on offer which are beneficial for an end-user but investors are least interested in such offers, as they want more of cash discounts. This is a good time to bargain with the developers and an end-user can negotiate better in the present market. The background of the developer and the asset quality is very important, apart from other regular precautions. The builder has a high inventory position and they are ready to offload it. End-users are easy to turn into customers and they can pay them better, as compared to an investor who is very choosy in this market.”
Experts believe that the market condition has changed a lot now, compared to what it was 2-3 months back. The market has now, only one uncertainty to tackle i.e. political risk and it has already found a way out of economic risk. Mudassir Zaidi, national director – residential agency, Knight Frank India, explains, “In terms of end-users, including ones who are going to stay with their investment, the buyer wants a property at a decent price. There are people available in the market from the developer’s side as well as the reseller side, who are offering properties at a good price. Developers are able to provide offers and freebies such as free car parking, extra space, etc., and end-users can also negotiate to choose properties as per their own preferences. It is a good time to buy property before the elections because after the elections, nobody knows how the market will respond. The fiscal situation is slightly better now; so, economic concerns are almost eliminated and the market has just one concern in the coming days i.e. political uncertainty. Till this uncertainty is there, we can see decent offers coming into the market. Thereafter, the market will respond in a different way.”
When selecting a property, what should an end-user be aware of?
Developers are offering many amenities and facilities to attract customers. You can get facilities like zero maintenance for two years and extra car parking space for free because the developer wants to clear the position. It is important to understand the location dynamics.
Sabharwal further points out that “A proposed master plan and an existing and future infrastructure development, are a few of the most significant criterion that the end-users should look at while selecting a property. The master plan gives us an idea of the ecosystem and its self-sustenance. There should be an optimal mix of building typologies in the surroundings, in terms of commercial buildings, retail, healthcare, institutions, etc., which make the ecosystem sustainable. The planned and current state of infrastructure such as roads, power supply, etc., is another very important aspect. For example, the advent of the metro rail in a new part of any city, changes the whole scenario of the local property market, in terms of end-user comfort and ultimately price as well as rent. Additionally, one should also not neglect the reliability quotient of the developer and his past records for quality, timely delivery and after sales customer treatment.”
Experts clearly warn that end-users must evaluate the offer and discounts properly because some times, developers show you an attractive discount and freebie but take away all the benefits from hidden tactics. If it is an under construction property, then credit default or delay in delivery is quite possible. They further advise to keep the basics right while buying a property. It is also important to understand here that there are many resellers working in the market, who want to exit their position which must be taken into account before straightaway going to a developer.
Is it a good time to take possession or wait for more discount in the coming days?
Property experts are optimistic about the realty market in the coming days. The risk factor is slowly diminishing and therefore, prices may escalate in the future. Sabharwal opines that “It is the right time to buy a property as an end-user. Currently, most of the developers are having an increased inventory which gives buyers strong negotiating powers to get good prices. Also, the introduction of the Land Acquisition Bill will definitely result in increased prices for acquiring land. So, one can expect a price escalation for future projects, as the developers will try and pass the increased cost to the end-users.” In the current market, the end-user can take advantage of resellers as well as developers with high inventory levels. Therefore, the benefit to present buyers is very high compared to past months.
Already, the market was witnessing political uncertainty due to the upcoming elections and it is expected to stay till the elections are over. No one can predict how the market would be after the elections. Zaidi further adds, “An end-user can take his position now as it will make no difference to wait till the elections approach closer. The bargaining power available to an enduser is only going to stay till the elections. After that, the investors too, will jump on to the buying bandwagon once the political uncertainty is over.”
State elections will not impact the market directly but it may set the sentiment for the next few months. Steps taken by the RBI in the last few months are helping the market to overcome a series of crises. Koticha suggests that “This is the best time for end-users to buy. The only uncertainty now, are the elections and developers are also well aware of it. Therefore, they are ready to offload at a discounted price. Buyers can get customised offers in this market and thus, this is the best time to finalise a deal.”
The stock market has already crossed the all-time high and the Indian rupee has also shown signs of improvement against the dollar. These are some signals that are pointing towards a recovery in the economy. The real estate market is watching the events closely and the only thing it is waiting for, is for the elections to get over. End-users are acting as price makers in the current market. So, if you want your dream home at more affordable prices at your desired location, then this is the right time!