It has been observed that any market grabs the attention of the rest of the world only when it is booming and when its investors have been seen making substantial profits out of it. That is the time when others are getting curious and looking to get into the market anyhow and grab some profit. But is that the right time to invest? Is that the right strategy to plan your investments?
It is definitely not the right time and the way to invest. The amount of return on investment highly depends on the time when the investment is made. Whether it is equity, mutual fund, or real estate, choosing the right time to enter the market is crucial. Investing while the market is on upside direction can make you exit any time without getting any return on your investment. So you should wait for the moment when the market seems to be in investors’ favor.
If you are looking for the right time to invest in real estate sector now, you should definitely do it. Why? A host of reasons have made 2018 the most lucrative year for the real estate investors. Let us see which factors make the market favorable for you.
RERA act and demonetization:
Until some time ago the real estate market in India had no regulatory authority. Neither any rule was laid down for the property transactions to take place. But the year 2017 has marked the regulatory terms and conditions for the developers and brokers of the property market in form of the Real Estate Regulatory Act or RERA. It is a call for action for those investors who did not wanted to enter the market that was run in an ad-hoc manner.
The act has compelled the small as well as big players to comply with the provisions defined in the RERA act. This has led to the attempts made by developers when they are committing to complete the ongoing projects to deliver on time and not entering any new project transactions. Research reports signify that new home launches in metro cities tumbled down by approx. 75% in the third quarter of 2017. Project launch rate has also decreased by 40% in first three quarters of 2017.
Excess supply and low consumption
When the supply exceeds the demand the price automatically comes down. This is a theory of the economy. In case of real estate as well, the low demand and high supply will definitely slash the prices. Demonetization abruptly seized the purchasing power of buyers and lots of units remained unsold. As per expert reports, the NCR has 2 lakh units of unsold inventory and Mumbai Metropolitan Region (MMR) has approx. 1.8 lakh of unsold inventory. This presents a comparatively better environment for the consumers as they are in the position to bargain and get the deal at their terms. However, this benefit to consumers will not remain forever.
In a few words, the RERA act along with demonetization has diverted the market towards the interests of the consumers. Not just consumers, but the changes brought will benefit genuine real estate players as well and will eliminate those who were looking to make profits through property market on short term basis. Besides, the RBI has also lowered the interest rates for home loans from 9.5 to 8.4 per annum, which cuts the EMI cost significantly. This rate is expected to come down further. Therefore, do not delay your decision anymore if you already have plans to invest in property market. You can get not just the deal of your choice but can also make considerable savings on availing home loan.