Further Price Fall In Real Estate Unlikely, Says PropTiger's CBO (Resale)

It may be a good time to invest in the real estate sector. However, a slow activity in the industry is an indication buyers are still in a wait-and-watch mode. A number of reasons have led to such caution among buyers. However, Ankur Dhawan, Chief Business Officer (Resale), PropTiger.com, says this might be the best time to invest. Edited excerpts:

Q. What could be the three major factors that may revive the real estate sector?
Dhawan: The first such factor is infrastructure development. We see a lot of construction going on across the country. With the completion of several expressways, metro networks and roads, many upcoming affordable areas would gain connectivity with central business districts or other work locations. This will drive demand for homes.

Another cause of concern for the sector has been slow process of decision-making. When key legislations such as the Real Estate Bill are put in place, approval process for projects will be streamlined, thus reducing builder costs. This will give real estate in India a major boost.

Apart from that, growth in the economic activity would result in increased salary levels. This will also drive buyers to the market.

Q. What about the future price trend in the residential segment?
Dhawan: In residential realty market, prices are have seen a major fall already especially against inflation. Only some pockets in Mumbai and Gurgaon might see a further price fall. In fact, we will see a rise in prices in cities such as Pune, Bengaluru and Chennai, where the prices have been stagnant, despite a growing economic activity.

Q. There has been a lot of talk about huge unsold inventory. However, buyers are still not able to find unit of choice?
Dhawan: The reports about project selling during launch period itself is old news. Nowadays, every developer has sufficient inventory to sell. It could be that in some cases whatever is left, may not be in demand.

Q. When can we expect builders to start cutting prices on such unsold inventory?
Dhawan: Builders have already been cutting price in markets across India. They have been offering schemes and major discounts. This is especially true for builders with large projects. Buyer may engage with builders and negotiate hard to get their preferred price.

Q. While buying a home, should one consider under-construction properties over new launches?
Dhawan: From an investment point of view, putting your money in new launches would be more beneficial, as it would cost you less while promising huge profit margins in future. For own use purposes, one should focus on under-construction or near-completion inventory.