There were two presiding concerns afloat in the residential market – one was the buyer expectation of a drop in property prices and the second was from the investors’ end regarding returns and market sentiments. Today, post the Union Budget and in the Remonetisation phase, market experts are confidently advising buyers not to wait but to take the plunge.
Nayan A Shah, CEO & managing director, Mayfair Group, dispelled the common misconception that property prices will drop. He told Magicbricks, “It is a myth. Post budget, there have been no discounts in the market. In the last 3 years, a significant rise in construction cost has been noticed. Developers have borne the rising costs (almost by 40%). The market has remained down since the last 2-3 years and during this period developers have not increased property prices.”
The real estate sector will be back on track in a few months’ time. In an exclusive interview with Magicbricks, Venkaiah Naidu, Union Minister of Urban Development, Housing and Urban Poverty Alleviation, said that the provisions made by the government should work as an impetus for buyers. He stressed on infrastructure and said, “Providing infrastructure status (affordable housing) will bring more money from banks to the market and will focus on creating more housing stock for the needy.”
Moreover, the Prime Minister has announced interest rate subvention schemes of 4 and 3% respectively, for housing of Rs 9-12 lakh and Rs 12-18 lakh. The budget announcement that instead of built-up area of 30 and 60 sq meter, the carpet area will be considered, will help create bigger houses for all, including the middle classes.
The phase of less transactions in the real estate market will soon be a chapter of the past. It was the short-term impact on the market, post demonetization.
Rajan R, a real estate consultant in Pune said, “In the long run, investors need not worry as at the time of investment there is a waiting horizon of 3-6 years. During this time frame, the market will be at a better position. The impact of demonetisation was short-term.”
Pune residential market statistics
Investment for 3-6 years is unlikely to hurt if a purchase has been made after proper due diligence and research. According to Magicbricks data, previous price trends show that the West and Centre zones of Pune offer good scope of investment. A long term investment is likely to earn healthy returns.
Considering property prices will fall back to normalcy in some months’ time, it will be wise to shortlist and buy a property soon. A good property at lower rates now will fetch good earnings in a few years. “It is a good time to buy. This is a buyers’ market and negotiations are available. Compare rates and go for a good location and project for better returns in future,” concludes Rajan.
In the West zone, properties are in the Rs 3,000-10,000 per sq ft range with the Rs 6,000-7,000 per sq ft being the dominant segment with over 50 per cent share.
This is followed by the Rs 7,000- 8,000 per sq ft budget with 23 per cent share. Most preferred localities here are Wakad, Baner, Aundh, Kothrud and Hinjewadi. Owing to infrastructure developments and availability of properties, the west zone appears to be a good choice for investors at this point in time.