Last year, Pankaj Mathur refrained from booking his dream home on the auspicious day of Akshaya Tritiya, in anticipation of a correction in Mumbai’s property prices. To his dismay, this bank employee found that prices remained firm during the festive season. This year too, he finds himself facing a similar dilemma – whether to buy the house now, or wait for the price correction that some say will follow. However, by monitoring the price index of the housing market over the last one year, Mathur has come to the conclusion that that these reports are meant more for the organised segment of investors, and not end-users like him.
“A marginal price correction may happen, keeping in mind the inventory level of the developers. However, I don’t think it is wise to postpone an essential investment like house, on a wishful thought. The market dynamics may change in a matter of a few months and a positive economic outlook may actually escalate the prices,” reasons Mathur.
Is it worth waiting for?
Many home buyers today, feel that they have been misled by reports of a price correction. According to a survey by Track2Realty, as many as 78% of home buyers found such reports to be misleading. The respondents maintained that such reports concealed more facts than revealing the expected price trends. Home buyers also seemed more conscious of the fact that price indexing is a subject matter of many variables and as an end-user, one should not bother about momentary price fluctuations.
Deepshikha Dharwad, a business analyst, believes that marginal price movements during the festivals, are marketing gimmicks to attract the investors and not the end-users. For any end-user, an investment is for no less than 10 years and hence, momentary correction or escalation does not have much impact in the long run, she points out.
See also: Affordable housing: The pros and cons
“A difference of a few hundreds, in the EMI is not worth waiting for. The risk factors are many, including the chance of prices increasing or losing the opportunity to buy the house of your choice,” adds Dharwad. Trading of houses during marginal corrections, is an investor’s game, she says.
The dilemma for home buyers
However, the decision may not be as simple for many home buyers, who have waited long for a price correction. While auspicious occasions like Akshaya Tritiya may tempt them to finalise a house purchase, they may still feel confused about the market trends. Many also end up disappointed when the price cut that the market has to offer, turns out to be less that what they expected.
On the eve of Akshaya Tritiya this year, buyers have many questions. Will property prices reduce further? Will the price cut be symbolic or substantive? Should I buy on the day of Akshaya Tritiya or wait for prices to fall even more? Will there be discounts on the festive day, as it is being reported? While there are many questions, there is no straightforward answer. Whether to buy a house or not, will plainly depend on each home seeker’s individual needs. Analysts point out that several attractive properties are available today, at the right price point and hence, Akshaya Tritiya may be the beginning of a turnaround in the housing market in some of the major Indian cities.
Market realities
- No uniform price correction across Indian cities expected on Akshaya Tritiya.
- Price correction will be subject to inventory level and demand and supply dynamics.
- Price point of affordable houses to remain firm.
- Some elasticity in prices in the mid-segment housing can be expected.
- Probability of price correction in luxury housing.
(The writer is CEO, Track2Realty)
Ravi Sinha is a journalist with nearly two decades of cross-discipline media exposure. He is the CEO of real estate think-tank group Track2Realty. He has been writing extensively on the real estate sector for nearly a decade. Evaluation of real estate brand performance is his expertise and he has immense insight into consumers’ psychograph in the property market.
Twitter: https://twitter.com/ravitrack2media
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