Is it Right time to buy a Property?

Some of you may already have bought a house/property and many of you are still waiting for the prices to drop. But will it happen in 2009?

We strongly feel, real estate will still go in for a major correction because we know anything which goes up has to come down and anything which comes down has to go up of course this has terms and conditions which is not of our importance here.

We see lot of attractive advertisements by real estate developers assuring buyers with buy back guarantees, free luxury cars, buy one get one free, houses at cost price, house at the price of 2005, apartments starting at 10 lakhs etc.

How is it possible? The clear reason is sudden fall in demand. How? Sub prime crisis in US caused large organizations to fail resulting in cascading affect to all industries across globe which resulted in stock market crash, job cuts across Globe etc.

Let’s understand. Who are the property buyers? 1. Investors and 2. Genuine buyers who buy house to live in it. While investors lost money in stock market, home buyers who are salaried are facing heat due to firing, lack of hiring and pay cuts where as home buyers from business background are fighting for their survival due to reduced consumer spending resulting in revenue and profitability drop.

So, these real estate players have marginally compromised on the profits and are trying by all means to hold the price drop.

One thing we should understand is, it is difficult for any body to accept loss and that too if they have seen huge profits till then. So, these builders are trying by all means to convince consumers that they are selling properties at throw away prices. But the catch is these builders are not transparent in the offers.

How long and how many consumers can they attract with these offers? Not long and not many..! They are exploring all routes to some how hold these prices thinking that the consumers will get back to them. They don’t understand the meaning of healthy growth. Once all the routes are closed, they will have no option but to really reduce the prices by at least 30-40%. So when will it happen? It will happen slowly say by end of 2009 as the government and financial institutions are trying by all means to help this important sector.

Though many home buyers feel cheated for buying these homes at higher prices, they can have a sigh of relief due to interest rates cooling off thus easing their EMIs.

Investors have to keep in mind that if the rental income from that property they have invested is giving more returns than other investments then they can go for it.

What you need to check? Whether you are getting the same property you wanted for reduced price? This includes the over all build, finishing, basic infrastructure for your apartment/house, location of the property, amenities, free parking lot, inclusive of registration costs, hidden costs, and last but not least carpet area of your apartment or villa.