indian economy worries – The world is surprisingly on its verge of turning down after years of rocking the sail. Low employment rate, low quality products, and low economic recovery have been the major characteristic of the economy today. Due to this, planning on things that focused on the ideas of “how to” and “when to” is a bit difficult and worrisome.
India’s real estate ratings have been heading to a steep slope for more than 8 to 9 months already. Associated with many conditions, this threat in India’s economic status have made a buyers to feel a considerable threat as to whether it is right to buy a flat during these times.
It has been bugging the minds of many buyers who ate too afraid to take a risk. In line with this, here are some thoughts for a buyer to keep in mind and reflect:
1. There is a shortage in dwelling units in India. Sustained lowering in interest rates can reignite demand. Banks and financial institution are vying with each other offering property loans at competitive interest rates. Increase in the income level of the prospective segment has also had its sway in the growing demand and therefore raise prices again.
2. Prices of flats, apartments and other properties in India tend to fall down in outer areas of metros, while those properties located within the premises of the main cities like Delhi, Mumbai, Bangalore and Chennai have prices that are rocket-high. In fact, houses, flats and apartments found in well-known residential areas have prices higher than what most residents in the city can afford. This reality is primarily attributes to the shortage of land that are used for building residential properties in such localities while the demand has kept rising as years go by, along with the growing wealth disparity in India.
3. Lack of infrastructures and security in outer areas of metros makes it less appealing for people to settle down in these locations. Moreover, due to these lacking amenities, many buyers would have a second thought of buying any properties in these areas since investing in such property would surely mean additional money to put up for everyday life. An example for this is a house away from your place of work. With this, you will have to pay for transportation fees. Aside from that, it would also cost you to lose some of your precious time in making your travel from home to work. In any how, in terms of the first situation laid in this third issue shows a significant portion of money that has gone into such locations has been investor money. Such locations are easily hurt by lowering of demand due to interest rate hikes.
4. Land titles remain a major issue in India, except in areas approved by local authorities. The price of large tracts of clean titled land and apartments/flats built on them keeps going up with the presence of the large amount of private equity money seeking large land deals. However, unless demand for such properties/ complexes in outer areas firm up, one can expect a flattening of prices here.
5. A significant number of apartments / flats in such large complexes have been bought by investors from outside the city, based on hopeful brochures. Well the danger here begins when you fail to assess the land and the builder quality personally s these brochures may be a fake.
Indeed, the most proper way of buying any property in India whether a house or a flat, is to focus on areas legally approved by the local authorities and within the easily reached distance to the metros.
Posted by My First Home Blog India