NEW DELHI: Six years ago, when Aniket Sharma bought a home in Dwarka for Rs 68 lakh, he had investment in mind as property prices in Delhi were at an all-time high. By 2018, when he wanted to dispose of his property, prices were hovering almost at the same rate. After three months of ardent negotiations, the maximum price he was offered was Rs 70 lakh.
“Had I put this money in stocks, it would have been at least one-and-a-half times higher than that. Going by what experts claim, I have to wait for another three years for the market to surge back, to get some profit. It was a bad decision,” Sharma lamented.
So, was it a wrong decision to invest in property?
“Buying a home for investment is not the same as buying a home for end use. So, the parameter for selecting a home for investment is totally different,” says Anuj Puri, chairman, Anarock Properties.
Location Matters
According to Puri, while the market remained dull for the last three to four years due to a host of reasons including introduction of RERA, demonetisation and GST, some markets have performed better than others.
While larger pockets like Delhi and Mumbai have not seen appreciation of properties in the last few years, markets like Bengaluru and Pune have seen good appreciation.
Similarly, even in the NCR region, while property prices remained stagnant in Dwarka and other areas, there was decent appreciation in markets such as Dwarka Expressway, Faridabad and Greater Noida, mainly on account of better infrastructure and good projects coming up in the region.
CONSIDER TIME FRAME
Like stock market, it is important for an investor to know when to enter and exit the property market. As property prices follow a cyclical growth, it is important to understand the market and fix the time period of your investment. So, if you are investing for five to six years and looking for an appreciation of 15-20 per cent, the choice of property should be different from what you invest in for 10-12 years time and expect a price appreciation of 25-35 per cent. Also, if you are investing for rental needs, the choice of location could be different.
SEE EMERGING MARKETS
If your budget is small, look at smaller towns and emerging markets. Chances are you will be able to buy a decent property for Rs 35-45 lakh in Faridabad or Greater Noida, than in Delhi. However, it is important to do a proper research of the market, see the real estate infrastructure in the area, track the employment opportunities available and general amenities that attract the population to come and stay.