Real
estate purchases are auspicious in India. However, over the last few years, the
shaky economy resulted in a very poor real estate market. Sellers tried to
unload their properties, but buyers sat back and waited for the economy to
stabilize before they spent their savings.
It’s
2014 and times have changed, though. A new central government, new business
policies, and a flourishing economy has affected the Indian real estate market
considerably. In fact, popular investment areas like Gurgaon are seeing a huge
flip-flop in prices and investment attitudes.
Real
Estate in Gurgaon
According
to a joint report released by EY and the Federation of Indian Chambers of
Commerce and Industry, the real estate market contributed about 6.3 percent to
the national GDP in 2013. This sector was also expected to generate about 7.6
million jobs during the same period. By 2025, the sector is expected to
generate about 17 million employment opportunities in India. Due to rapid urbanization, rising revenue levels,
and positive demographics the Indian real estate market saw considerable growth
in 2013.
The
year 2014 has changed the real estate market though. The year started strong
with great property rates and burgeoning investment in commercial and private
properties. However, sales of residential properties declined in mid-2014. This
was particularly true in around Delhi-NCR. In 2013, Gurgaon was THE place to
buy property. Reliable builders, lovely properties, affordable rates, great
amenities, wonderful infrastructure, and rapidly rising property rates were the
main reasons for this national and international interest. Property rates
spiked in 2013, but in 2014, many markets dropped.
Several
real estate developers are now reeling under high debt due to flaring
construction and labor costs. They also had to contend with high interest rates
and delayed product delivery that depressed the market even further. Gurgaon
was considered India’s premier realty market, but it is now facing a fall in real estate rates that could prove lucrative for first-time buyers. Several builders have
already launched properties, and they are offering Statements of Purpose as
well.
However,
the increase in supply is not commensurate with demand and this has led to an
oversupply of great properties in the NCR – Gurgaon region. This subdued demand
resulted in an automatic correction of 5 percent to 10 percent in property
rates in the same region, according to India Info Online. This pinch was also
felt in the commercial property market as well. The fall in interest was attributed
to the subdued job growth in the IT market and sagging hiring rates in the
software industry. According to The Economic Times, prices could stagnate or
fall marginally over the next year, making this a great time to buy property.
2014-2015
– The Real Estate Market For Buyers
This
real estate market could be great for property buyers. But even though the
supply of property is rising, many buyers are waiting for the market to fall
even further.
The Delhi-NCR
residential market faced a downward trend in demand since early 2014 as buyers
waited for prices to fall further. Some market experts were also predicting a
17 percent fall in demand, which could lower property rates even more,
according to the FICCI report. This could change anytime though. With the Union
budget posting substantial incentives, the market could rise and level out by
2015, according to Meri News. As a result, mid-2014 to end-2014 is a great time
for small buyers and first-time investors to snap up properties in the NCR
area. Market experts are also cautioning buyers from waiting for home loan
rates to fall further.
Another
very important tip offered by industry watchers is to choose areas like Greater
Noida West where you can find property in Gurgaon by Unitech Group. These areas have several new properties and
supply is high. Buyers can negotiate rates and get some discounts as builders
are trying to sell property faster. Commercial property can also be a great
investment opportunity as corporate buyers have postponed expansion plans leading
to a glut of commercial property for sale. For small buyers, this is a great
potential opportunity to diversify a financial portfolio with commercial investments.
Meri News
also stated that the overall mood in the market is optimistic. The recent
changes in the budget and a slowly improving GDP could result in the real
estate market rebounding by late 2014 to early 2015.
The
Bottom Line
Many
buyers are sitting back and waiting for the prices to stabilize, but this
decision could backfire on them. With a new progressive government in place, a
budget that’s focused on improving the realty sector, and a burgeoning GDP,
buyers should snap up residential and commercial properties right away. Cash-strapped
builders are offering discounts, statements of purpose, and various freebies in
order to help sell stagnating property. Buying property now could mean a huge
profit for you down the road, provided you make smart decisions.
