Property Prices Going Down in Delhi. Ready to Buy?
July 30, 2014
Purchasing a property is eventually the biggest investment for salary earners, so buyers must undergo detailed planning before making themselves to this long-term investment. However, for those looking to buy a house in Delhi or the National Capital Region i.e. Noida, Greater Noida, Gurgaon and Ghaziabad a good deal is waiting.
Property prices in some pockets in Delhi and the NCR have fallen by over 20 per cent year-on-year, according to the National Housing Bank's Residex index, which tracks residential property prices across 26 cities in the country. In fact, Delhi is the only metro, where prices have dropped in the March quarter.
Property prices have fallen because of a combination of slow economic growth, high interest rates and high inflation. Developers are burdened with high debt forcing them to cut prices in some markets.
In Delhi, prices have dropped in places such as Dwarka and Mayur Vihar, where buyers can get two-BHK apartments starting Rs. 65 lakh. Such apartments in NCR will cost much less depending on the stage of construction and location.
Here are the few aspects one should consider before undergoing through property purchase phase:
No Further downside of price
The formation of a stable government at the centre has bolstered sentiments in the real estate sector. According to Care Ratings, downside risk to pricing has reduced considerably in metro-cities and in case of tier II and tier III cities, prices are likely to increase in the range of 8 per cent to 10 per cent, with the expected recovery in volumes. The new government's focus on land and infrastructure development will also spur demand in properties and support prices.
Growth recovery will boost consumer moral
Home loan offtake has remained stagnant over the last three years because a sharp slowdown in the Indian economy impacted sentiments among salary earners. Salary hikes in India will average just 10 per cent in 2014, according to global human resources firm Aon Hewitt, when inflation has averaged 9.54 per cent from 2012 until 2014. Salary hikes in India will average 10 per cent in 2014, the lowest in a decade, according to a survey of 565 companies conducted by global human resources firm Aon Hewitt.
EMIs will come down
EMIs on home loans are expected to come down by 8-10 per cent following the recent move by Reserve Bank of India to ease norms for banks to raise long-term funds for financing affordable housing projects, consultancy KPMG said on Wednesday.
The RBI said that lending for affordable housing means loans eligible under priority sector, and loans up to Rs. 50 lakh to individuals for houses costing up to Rs. 65 lakh located in the six metropolitan centres - Mumbai, New Delhi, Chennai, Kolkata, Bengaluru and Hyderabad.
"The recent move by RBI is a welcome move as it would help stimulate demand for housing and make houses affordable to some extent," said Neeraj Bansal, partner and head of real estate and construction at KPMG.