of inventory,” says Navin Raheja, president, National Real Estate Development Council.
BARGAIN HARD, BARGAIN WELL
Given that delays are par for the course, there is another less explored arena — the resale market — that has the prospect of good deals, especially if the purchase decision is geared towards end-use.
“People who invest in depressed markets are always in advantageous situation and make good returns on capital investment despite paying higher interest rates,” says Raheja.
The current slowdown in demand and high interest rates has also hit investors hard and this segment of the buyers are losing their holding power and are looking to offload them as soon as possible, says a director of a leading brokerage who declined to be identified. The only participants in the market now are end-use buyers and for them, the situation looks promising. Unverified data from industry sources point to a decline in the range of 10-25 per cent across metropolitan markets.
“This is mainly due to the inability of investors to keep up with high costs. Most were looking to cash in on the boom, and have now put their houses up for sale,” says Advitiya Sharma, co-founder, Housing.co.in, a real estate portal. Sharma adds that the number of resale listings covering metropolitan markets across major portals has gone up by 30 per cent over the last six months.
Kumar too agrees that the resale or secondary market has good opportunities but buyers should factor in higher capital requirements and also additional costs.
“Secondary market in current real estate outlook seems more promising as a buyer can get better price points. But the buyer may need to have higher payment thresholds. Also since in many of the projects, developers have put in prohibitive measures such as high transfer charges before the completion of project, valuation might also not be that attractive in some cases.”
Panchapagesan advises the buyer to bargain hard, for there are deals that can be got. “Buyers must aggressively bargain to get good already constructed properties at a discount rather than book now and wait for ever for development to happen. My mantra for prospective buyers is bargain hard after doing research.”