Should you invest in Indian Real Estate(Property Market) now?

In this article, we will discuss about how has Investments in Indian Real Estate(Property Market) performed in the past 3-4 years and how it is likely to perform in future.

In India, Property prices have stagnated by and large for the last 3 years. Government has been cutting home loan rates. The Real Estate (Regulation and Development) Act (RERA) has come up which is expected to save the buyer against delays and frauds. Real estate developers and property agents/brokers have been insisting prospective buyers to buy the property by telling them that this is the best time to invest in property and property prices are going to start their upward journey soon. Low interest rates, RERA, GST, PMAY(Pradhan Mantri Awas Yojana), Speculative development of infrastructure in an area are some of the reasons being qouted by the Real estate developers and property agents/brokers for steep hike in property prices in future.

Will the property prices rise in near future? Should you invest in Indian Real Estate(Property Market) now? Knight Frank,a consultancy firm has recently released a research report which depicts that housing prices in eight major cities of India rose very marginally in the past three years. There are some markets like Delhi/NCR (National Capital Region) and Kolkata where real estate prices have actually come down since 2014.

We cannot generalize the above statements for the entire real estate market of India.Some cities have witnessed a consistent decline/stagnation in property prices while others have witnessed a continuous rise. Some areas within cities have witnessed price rise while others have witnessed downfall.

However, looking at the current situation, property prices are not likely to shoot upwards in the next couple of years.The Knight Frank study gives a realistic picture usually not shown by the real estate developers and the property agents. The signs which are not good are the huge number of unsold units (more than 1.8 lakh in the NCR) and the long time taken to sell a property (up to 35 quarters in Faridabad). These points indicate that Property Prices are not likely to move up significantly in the next 2-3 years.

Click here to download the Knight Frank’s research report titled India Real Estate – January – June 2017.It is a comprehensive analysis of the residential and office market of the top eight metros in India – Ahmedabad, Bengaluru, Chennai, Hyderabad, Kolkata, Mumbai, NCR & Pune for the period between January to June 2017.

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