Industry experts feel that investors should be extra cautious about locations with excessive supply of housing units. Reports indicate how 120,000 units were sold in the top-7 cities of India for Q3 2023, posting 36% of growth (year-on-year). Prices are also appreciating in double digits, shooting up by 11.4% approximately throughout this period.
Pent-up demand after the pandemic and the desire for bigger homes has been spurring real estate growth consistently along with the RBI’s stance on keeping the repo rates constant. A majority of the supply in the housing market is currently from branded developers which is indicative of homebuyer preferences. RERA has also given a sizeable boost to buyer confidence.
According to the Co-Founder and Chief Business Officer, Asset Management Services and Data Intelligence, Square Yards, Anand Moorthy, several projects are now nearing the completion stage minus any lags or delays. A stronger Indian economy has also made several buyers turn to real estate once again, irrespective of rising prices. Several buyers are investing right away in order to avoid paying higher prices later on. Several investors are steadily coming back to the market although they had exited previously. This is clearly indicated through the growing demand for newly-launched housing units. Reports show how 43% of unit sales for Q2 2023 (115,000 units in India’s top-7 cities) were for newly-launched projects.
Under-construction properties should be RERA-registered, including the phase where one is investing in. According to Anand Moorthy, the sale agreement should be in the RERA-prescribed format and should be examined carefully before finalizing the transaction and signing the deal. The sanctioned plan should also be perused to know more about the carpet area, while a law firm should be hired for an extensive title check.
Buyers should also be clear about their affordability. The EMI, based on the peak scenario for interest rates should not cross 30% of the take-home salary of the buyer according to experts. Investors should stick with quality areas and trusted developers. Properties by branded developers in areas with good social and physical infrastructure can turn out to be rewarding in the long run.
Anand Moorthy also advises investors to be extra-cautious about investing in locations with huge supply of housing units. He also feels that buyers may look to avoid mega or large projects currently, since the supply continues for a lengthy duration from the developer, making it tougher for investors to earn better returns. Investors should also have accurate information on the completion cycle and timings for the project along with finding out whether there is any lock-in clause of the developer or whether the company will ask for a transfer charge (0.5-1.5%) for selling the unit prior to the completion of the project. These are some things that investors should keep in mind according to industry experts.
For a detailed report on this read the articles we were featured in:
Business Standard: https://bit.ly/3rPZGuI
Published Date: Oct 11, 2023
