Is it a good time to invest in real estate?
By Anuradha Shukla | Express News Service | Published: 08th January 2018 07:58 AM |
The worst phase may be over for the realty sector, which was disrupted by the triple ripple of demonetisation, implementation of Real Estate Regulation Act (RERA) and Goods and Services Tax in 2017.
However, experts feel the spill-over effect will continue even in 2018 and that revival will be slow.
“Recovery will be gradual and it will take three to five years for the sector to be back to normal,” says Anuj Puri, chairman of ANAROCK, a real estate consultancy.
To invest or not?
Samir Jasuja, founder and managing director of PropEquity, explains: “This is a good time to purchase real estate for end users and long-term investors. This era of reforms and added structure will improve the market but only in the medium to long term. There could be some recovery for ready and resale prices... not too much increase in prices is expected.”
This means investors who are looking for short-term gain should stay away from the market. For the end user, though, this is the right time to buy a property. The valuations are right, prices are competitive and there are plenty of options available. The long-term investor who can withstand the downturn in property cycles can get favourable returns in the next five years, provided they have invested in right location and right segment.
According to Ashwini Kumar Hooda, deputy managing director, Indiabulls Housing Finance, this year will see “a huge growth in home purchase transactions in the `25-50 lakh bracket, spurred by the reforms introduced in 2017 and its varied benefits being passed on to the middle income categories”.
“We do expect to see the affordable housing segment grow substantially over the next few quarters, and be the growth driver for the real estate sector in the coming year,” says Brotin Banerjee, managing director and CEO, Tata Housing.
According to him, rate cuts by banks may translate into lower home loan rates and EMIs in 2018. Also, experts feel that a few tier-2 cities are favoured destinations for real estate investments, as prices are low there and there is scope for a lot of industrial and residential real-estate development.
Ankur Dhawan, chief investment officer at real estate consultancy PropTiger.com, adds: “The prospects in regions such as Nagpur and Nashik look good, where industrial and commercial development have been picking up pace steadily but where demand for real estate was still relatively low. You will, then, be able to get good returns in Hisar (Haryana), Mysuru and even Bijapur in Karnataka.” Other locations for investing, according to him, are Coimbatore, New Gurgaon and Rewari.