Will 2018 be a good time to invest in real estate?

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Will 2018 be a good time to invest in real estate?

• Forest Nest

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Introduction

• Real estate which was one of the most sought
  after investment avenue among India has seen a
  dip in its popularity off late because of the
  stagnation or dip in prices.
• In line with the past three-four years, the
  performance of real estate in 2017 was lacklustre
  in terms of growth in prices and sales. Real
  estate which was one of the most sought after
  investment avenue among India has seen a dip in
  its popularity off late because of the stagnation
  or dip in prices.
• Apart from this, real estate has been considered
  a safe haven for parking black money but the
  reforms such as Real Estate (Regulation and
  Development) Act (RERA) and Goods Services Tax
  (GST) and Demonetisation brought in by the
  government to curb the black money menace has hit
  the sector hard.

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Why You Should Invest?

• Spate of regulatory reforms
• From the past few quarters, the real estate
  market in India has been going through a phase of
  massive change. The regulatory reforms
  implemented through frameworks defined under the
  Real Estate Regulatory Act (RERA), and Goods
  Services Tax (GST) to an extent, have led the
  sector in a certain direction.
• It is mandatory for all the real estate projects
  to be in compliance with the provisions of RERA,
  which attempts to make sure that projects are
  delivered in time and the money paid by buyers
  for certain projects is not squandered for other
  purposes.
• In short, RERA protects consumers interests. It
  will be impossible for fly-by-night operators to
  be in the market and only the most-committed
  players will be able to navigate the roadmap.
  This will benefit both buyers and sellers, in the
  long term.

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It is a buyers market

• The combination of excess supply, high prices and
  low consumption has translated into huge
  inventories across the country. The consumption
  side has also been impacted by demonetization.
  Clearly, it is a buyers market for now and for
  the next few quarters. But not for long!
• With RERA in place, developers are now focusing
  on completing their existing projects. The new
  home launches, across top eight cities in India,
  have gone down by more than 75 percent in the
  third quarter of the current fiscal, as per
  industry research reports. The overall number of
  project launches has gone down by more than 40
  percent in the first nine months of the current
  calendar year. These trends imply that the supply
  side will gradually find some equilibrium with
  demand, and prices will subsequently start
  picking up pace.
• However, in the present environment, there is a
  situation of excess supply and property buyers
  are in a better position to negotiate, and grab a
  great deal.
• As per industry reports, the National Capital
  Region (NCR) and Mumbai Metropolitan Region (MMR)
  have around 2 lakh and 1.8 lakh unsold units
  respectively.

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Home loan interest rates are at all-time low

• The excess liquidity in the banking system have
  led the RBI rejig the key lending rates.
  Resultantly, the home loan interest rates that
  were recorded at around 9.5 percent a year in
  2016 have now been floating in the range between
  8.3-8.4 percent.
• That makes for considerable savings in the EMI
  costs enabling people to avail of low-cost home
  finance, and become a home owner. It is expected
  that the home loan rates will remain low for the
  next several quarters and may even come down
  further.
• Considering the average annual rental yields at
  5-6 percent, there is not much difference between
  the costs of rent and owning a home.

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Steady revival of interest from global investor
fraternity

• The implementation of overarching regulatory
  mechanisms has instilled a much higher level of
  confidence in the global investor fraternity. The
  real estate sector is projected to receive
  Private Equity (PE) investments to the tune of
  US4 billion during this fiscal year, as per
  industry reports.
• Not just the PE funds from the US, Canada and
  Singapore are interested in infusing capital in
  the sector, but countries such as Japan, China,
  Qatar, Hong Kong and the Netherlands are also
  poised to invest in the sector.
• At the same time, global sovereign wealth
  fundsthat are otherwise known for their
  risk-averse, conservative approachhave been
  increasing their exposure to the market and it
  proves that the sector is headed in the right
  direction.
• As for property buyers, it is a sign of revival
  on the cards.
• In overall, the current environment presents an
  opportunity to buy property and make the best out
  of the coming year.

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Conclusion

• 2018 is unlikely to see any price rise in 2018,
  however the recent reforms will boost the
  confidence of the home buyers and sales are
  likely to pick up in 2018, believe experts.   
• "The real estate market in 2018 is expected to
  show price levels on a similar scale when
  compared with those of 2017. All in all, the year
  will remain a good time to buy. It is expected
  that the market will see more options in ready
  stock since a greater number of completions are
  to take place in the next year," says Samir
  Jasuja, MD Founder, Prop Equity.
• So as per the above all statements , investing in
  Real-estate like Gated Community Villas in
  Srisailam Highway, Hyderabad apartments is huge
  profitable in the coming years.