Don't Sell Your Home Dirt-cheap; Prices Are Not Going Down!

Wait, did someone tell you that real estate prices have been going down and you must hurry to sell your home to fetch a good price? Just don't believe that.

It's true, prices for real estate in India have been stagnating for a while. Housing Bank's index, sidex, suggests that property prices in the top Indian cities have not risen much over the past few years and that only 9 Indian cities have seen prices appreciating for 10% or more annually, between the years 2007 and 2014. In this period, property prices rose merely 8% in the 26 cities sidex tracked.

But, much against the speculation, prices have not been going down, but stagnating at best. This is a generally observed pattern in residential property markets in prominent Indian cities in the recent past. So, hold that home sale!

Home buyers may rejoice, too! According to the most recent report of the Data Labs, the research-driven big data arm of PropTiger.com, released this month, residential property prices have been generally stagnant across cities since the first quarter of 2013-14 to the first quarter of the financial year 2015-16. In the 16 areas PropTiger Data Labs tracked for the report, the greatest price rise was seen in Bangalore Property, Mumbai and Yamuna Expressway. The real estate prices in these three areas grew equally at 6%.

In some cities like Noida and Chennai, residential property prices even declined in this period. In , the decline was -4% and in Chennai, the decline was -2%. In and Ahmedabad, prices did not appreciate at all. But, in all the other cities, property prices rose modestly. In and Bhiwadi, residential property prices rose 2%, while in Thane, Navi and Pune, the rise was only slightly higher, 3%. In , it was merely 1%.

What's in it for investors?

Should the potential investors steer clear of residential property markets? Perhaps not. Throughout the world, there were instances of long periods of unsold inventory being followed by a quick recovery. Even though many have been predicting that prices have reached a peak and that it would fall at any moment, such predictions do not mostly come true.

India is one of the rapidly urbanizing countries. When more families migrate to large Indian cities, it is quite probable that this unsold inventory would be absorbed with home prices rising again. As developers have not slashed prices significantly, this could be in anticipation of sales picking up very soon.

Moreover, excess inventory can happen because of temporary factors like a change in market psychology, falling income levels or rising unemployment.

If this is such a transient aberration, don't sell your homes dirt cheap. And, but if you have been planning a property purchase, do rush. Prices might appreciate very soon!