It is finally happening. Property prices that had soared and stayed stubbornly high in certain markets despite the decreased appetite for deals are finally dropping. After refusing to budge from their pricey demands, sellers are finally coming to the market to negotiate exits. These are mostly investors, who have seen good appreciation in their investments over the past years, but after failing to strike deals at peak rates, that were regarded as going rates, they are now looking to liquidate their investments and realise the gains.
The fact that property prices in several high appreciation zones of cities have stagnated in the recent past has given rise to anxiousness that some of the gains of the past might start to erode. What has been most worrying is, despite putting properties on the market for some months, many investors have found few serious buyers. What’s more, most prospective buyers aren’t willing to pay rates even remotely close to the expectations of sellers.
That developers are aggressively pushing new projects with big discounts and attractive financing schemes isn’t helping matters for sellers of existing properties. The biggest plus for existing properties is immediacy — buyers can move in as soon as they seal the deal. However, with the introduction of newer amenities in upcoming projects, the old stock in many cases is looking dated. Smart homes with biometrics, climate control, et al, make developments completed just a few years ago look like projects of a bygone era.The degree of obsolescence is another big factor weighing on existing stock, especially since a large number of residential societies are unable to get all their members on board to invest in upgrades to keep pace with the times. This has made investment in old stock tricky. There is a possibility that with new projects coming up, a temporary perk up in valuations is seen, as the locality starts acquiring a different feel. However, in time, rates may drop as buyers prefer paying a little more to stay in modern developments in the area. Given this, swapping your existing home for a more contemporary dwelling may not be a bad option in the long run.
ADVERTISEMENT