Next 18 months right period to buy residential properties in Mumbai, Delhi: Experts
As the RERA Act has come into effect from May 1, the industry experts have said that the next 18 months would be the right period for first time home buyer to buy residential properties in Mumbai, Delhi, among others.
1. The next 18 months are a good time to buy properties in metros like Delhi and Mumbai, says Sai Estate Consultants
2. Buying a house in the current market is favourable, as the future of real estate is always unpredictable, says Nirmal Lifestyle
3. Apart from tier-1 and tier-2 cities, cities like Thane, Navi Mumbai, Nashik and Pune are considered to be good investment options for buying houses
As the landmark real estate bill RERA Act comes into force nationwide experts have said that the next one-and-half year would be the right time for the first time home buyers to buy property in cities like Mumbai and Delhi.
The Real Estate Regulation and Development Act (RERA Act) is aimed at addressing the grievances of property buyers who at times are cheated by developers on delay in delivery of under-construction properties, execution of said project plans, legitimacy of properties, etc.,
The Government of India had implemented the RERA Act across the country on May 1 this year.
The act makes the developers or promoters more accountable for their real estate projects.
As the RERA Act has come into force across the nation, we tried speaking to some experts from the industry to understand whether it's the right time for the first time home buyer to buy the property or should he wait for some more time.
“...Between January 2017 – mid 2018 is a good phase to buy properties, beyond 2018 there will be a slight increase in the prices as the unsold stock by then would have been absorbed,” Mumbai-based real estate property dealer Sai Estate Consultants director Amit Wadhwani told Zeebiz.com in an e-mailed interview.
"Dumping ground issue and the stay order by high court on construction of open grounds will be resolved in the next few months; all this will ensure that there is fresh supply coming into the market. Having said that the next 18 months are good time to buy properties in metros like Delhi and Mumbai,” Wadhwani added.
According to Wadhwani, the coming months are the best time to negotiate and buy the property as the banks have slashed their home loan interest rates which are at all time low.
Mumbai-based residential and commercial property developer Nirmal Lifestyle believes that buying house in the present scenario is favourable for buyer from the long-term perspective.
“If you take into consideration long-term prospects as opposed to immediate financial benefits, buying a house in the current market is favourable, as the future of real estate is always unpredictable. New and on-going projects displaying discord with the RERA regulations should be avoided,” Nirmal Lifestyle CMD and president of CREDAI-MCHI Dharmesh Jain told Zeebiz.
Jain further said, “Well established names who have consistently upheld credibility and reliable records can always be looked at as viable options. Those developers which have shown compliance with the parameters underlined in the Act in regards to upcoming new projects can be considered now.”
On asked about the impact of RERA Act on home prices in the next seven months, Sai Estate Consultants feel that the residential prices will remain stable and builders marketing the project plan corrrectly stand to witness increase in sales on weekly basis.
“2016 to 2019, I see prices staying where they are, where there will be a polarised absorption. Developers who are marketing correctly would continue to have sales week-on-week. There is a no scope for correction in prices. The demand will remain stable, because everybody in India is looking forward to buy property if there is credibility on the part of the developers,” Wadhwani told Zeebiz.
Going forward, the real estate property dealer do not see any changes in prices of the residential properties in the country.
“We do not really look at any correction in the prices of inventory in metro or other tier-1 and tier-2 cities in India because there is already a correction in the market. Hence, the next six months there will be a phase of plateauing the prices. If the there is an increase in absorption the prices will continue to rise. I do not see a further correction,” cited Wadhwani.
Moreover, the industry players believe that RERA Act will bring more confidence among buyers as the act will penalise the developer or promoters for project delay and delivery fulfillment.
The RERA Act makes its mandatory for developer or promoter to register ongoing and upcoming real estate project before marketing or advertising it.
Under the Act, if developer or promoter provides false information or contravenes the provisions of registration of real estate projects - he has to pay penalty upto 5% of the estimated cost of the project .
“The implication of RERA makes real estate market more accountable and transparent. The real estate markets could shift its gear if the buyer gets more option in terms of cash liquidity.This is not only helping the realtors deal with any sort of cash crunch and unsold history but it will lend a hand in boosting the real estate market,” Jain told Zeebiz.
Echoing similar views on RERA Act, Wadhwani said, “RERA is basically an icing on the cake, where between January 2017-July 2018 will be a phase where all developers if offered a good price they will take the opportunity keeping in mind that buyers are going to be cautious.”
In terms of cities where a first time home buyer can invest in residential properties Sai Estate Consultants sees cities like Thane, Navi Mumbai, Pune and Nashik, among others as good investment options
“One can look at Thane with good infrastructure, great valuations, broader roads, predictable construction quality and on time possessions. Locations like Navi Mumbai, the connectivity between PC,MC and Pune and outskirts of Panvel. Other corridors like Nashik and Alibaug will be compartitively lower in business concentrations but Thane and Navi Mumbai will be going to be the favourites in the times to come,” Wadhwani said.
Similarly, Nirmal Lifestyle sees that Mumbai's suburbs and other tier-1 and tier-2 cities to have lot of option for affordable and mid-segment housing.
“Within the boundaries of Mumbai itself Mulund, Kharghar and Taloja are seen as promising while Kalyan and Thane too, have a lot to offer. Tier-1 and tier-2 cities are providing a lot of options for affordable and mid-segment housing, as they are now in demand,” Jain told Zeebiz.