T he year 2017 has not exactly lived up to the expectations of the residential property sector. RERA has been deployed, but as of today, only 18 states and 7 Union territories have notified RERA, while 10 states are yet to notify it.
While the Act has certainly made its expected effects felt in states like Maharashtra — which includes very important markets like Mumbai and Pune — it has not yet extended its full influence over parts of the country where RERA it is probably needed the most.
Best time to buy
Let’s start with some good news. If you’re looking to buy a home for self-occupation, now is probably the best time you could have hoped for. There is a massive supply of ready-to-move-in property options available at rates which would have been considered impossible 4-5 years ago. Even if your budget is modest, you are no longer restricted to under-construction projects which may take years to be completed. You can literally buy and move in now.
The residential market now primarily favours end-users. If you’re an investor who is hoping for some quick profits, look elsewhere because Indian residential property is definitely not what you're looking for.
However, if you are a patient long-term investor who understands property cycles and market readings, this is your time to shine as well. Four or five years from now, your investment will have grown in value.
RERA and GST
If you live in a state where RERA has been fully deployed and prefer to buy in an under-construction project, refer to the RERA website, look for projects by reputed developers who have committed to reasonable completion timelines and buy with confidence. Ready-to-move projects are also covered, and you’re therefore assured that any flaws or deficiencies in a ready flat must and will be corrected in a specified period.
If you live in a state where RERA has not been deployed yet (or where the laws have been heavily diluted), focus only on ready-to-move-in options unless the developer is of impeccable market repute. Some names are synonymous with reliability since they bring with them the assurance of high capitalisation and a strong reputation for timely delivery, assured construction quality, good amenities and sticking to the promised development plans. You know who these developers are. Play it safe and patronise their projects, and RERA becomes a factor that you need not worry about too much.
GST, while technically a good move for all industries, has brought more confusion than benefits to the residential sector so far. This is because the GST exemption is currently being used as a marketing gimmick without being fully understood by buyers.
On the positive side, home loan rates have sunk to a 10-year low and property prices in most cities have also been reduced to the lowest point that developers cannot afford to bring them without actually dooming their businesses.
Remember that a credible property consultant:
- Does not charge you brokerage (the developer of the project you select is the only party who pays brokerage)
- Is duly registered under RERA, has a registration number to prove it and can explain to you all the nuances of this important Act
- Offers you a variety of options based on your budget, choice of location and other preferences, and does NOT try to hard-sell you anything
- Negotiates with the developer on your behalf and also helps you with obtaining a home loan
- Is with you from the start to finish of your home hunt – literally from the initial search to when you move in – and even after that
Buying tips
Understand your current and future finances. If you are currently at the very outset of your career, it may make more sense to rent for a couple of years rather than buy at this stage, even if you have sufficient reason to be confident of your growth graph.
Property prices are unlikely to grow significantly over the next 12-18 months, and if your salary grows in this period, you will still be able to buy a good home two years from now.
Evaluate festive offers and freebies. You may not really need a gold coin, probably already own a decent car, and a family holiday abroad may not make much sense if you would rather stay put and focus on your career for now. However, a free parking space, waived stamp duty and registration fees and maintenance-free periods do add to your savings, and therefore to the value of the deal. Air conditioners, modular kitchens and furnishing are also expenses you may incur on the property sooner or later, so getting them free now adds real value, as well.
Don’t be overly focused on the cost. If you have the base budget in place and are firm on wanting to buy a home now, you can leverage it via a home loan to buy into a good location, in a project with amenities which offers you and your family a decent lifestyle for the next few years.
The writer is Chairman, Anarock Property Consultants
