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ANAIR & JOYDEEP GHOSH

umanta Rudra, head of infrastructureand administration at VFS Global, hasdecided to defer buying a property. I am

ecting a correction in property prices. I willy take a call about buying after thetions.

With the festival season coming, there willplethora of advertisements in newspapersyour email boxes will be flooded with pro-ional mailers goading you to buy property catchy lines such as Buy before proper-rices go up further, Get the best dis-

nt, etc.However, many like Rudra are unwilling to

arried away. They feel deferring the deci-will work in their favour. Of course, there

other issues. As a banker says, Given theh economic conditions, most people areilling to part with liquidity. So, even ife are great deals, the feeling is lets wait fore more time. Add to that the Reserve Bankndias (RBI) red flagging of the 20:80mes due to fears of default from builderpeople are unwilling to commit, at least forime being.

t is not that corrections havent taken place.pective buyers are offered teaser price cuts-10 per cent in Mumbai and Delhi andhtly over 10-15 per cent in other cities.or example, in February 2012, a four-bed-

m flat in Jolly Maker 1 at Cuffe Parade, oneumbai's most expensive residential areas,sold for ~29 crore. The transaction wasrted widely as the highest-ever price for a

dential apartment. Today, a similar flat in

same building will not fetch more than26 crore.

According to National Housing Banksdex, an index for property prices, proper-rices at Cuffe Parade and Malabar Hill ofh Mumbai have fallen by almost nine perin April-June 2013 compared to January-

ch 2013. Even for Mumbai as a whole, thedex shows a slight dip in prices. The trend

milar in 24 out of the 26 cities for which theonal Housing Bank provides data.

n order to sell, some builders are givingcar parking and/or bearing the stamp dutyregistration. However, no builder willit to it since it will send out distress signalsher potential customers, points out Omja, CEO-Residential Services, Jones Lang

alle, India.he question, for the likes of Rudra, isther it will fall further. V K Sharma, man-g director and CEO of LIC Housingnce, feels if you are buying property forstment, then you should wait for some

e. A major appreciation in prices from theent levels looks difficult. If you are not innt need, then it is better to hold your buy-

decision for now, he says.f you are looking at buying your first prop-and, more important, one in which you

nd to stay, the traditional answer is: Dontat prices. The answer stays the same, buta caveat prices are unlikely to run away

he near future, so delaying the decision iskely to hurt substantially. If you want tonow, ask for discounts. Faced with over-

ply, developers will be more than willing ifare convinced you are a serious buyer.

le appreciation in the near future

real estate sector has been in trouble fore time. However, prices have beenient because builders have received fund-from potential buyers (through home

ns), private equity and investors.nwhile, builders have launched projects,

ch are yet to be sold. In Mumbai itself,

some 10 million-plus flats priced at over ~1crore are said to be lying unsold.

Meanwhile, new projects have beenlaunched even as existing projects havent soldout completely. Obviously, capital apprecia-tion is not something most experts expect.Anand Moorthy, head (real estate services) atRBS Financial Services, says there is humon-gous supply in most residential areas, even inthe secondary market. Investors should notexpect more than five-to-eight per cent growthin prices in most cities for the coming one-twoyear horizon for realistic gains. Another reasonto wait, especially for investors, is because realestate is not liquid.

Anuj Nangpal, managing director (investorservices ) at DTZ India, says: The anticipateddownward pressure on prices is expected toprevail in the short-term owing to significantinventory overhand across most micro mar-kets. Additionally, the recent hike in homeloan interest rates along with continued slow-

down in economic environment has furtherdampened sentiments amongst prospectiveend users. The consequent drop in demandhas further limited any opportunity for priceappreciation in near future, he says.

Is this a buyers market?

Some feel that buyers are on a stronger wick-et. Lalit Jain, chairman of the Confederationof Real Estate Developers Associations ofIndia, says: Our costs have increased sub-stantially. In fact, we have sent an advisory toour members saying they can sell at the low-est prices due to the liquidity crunch. Whatcustomers are getting today is the best priceand at the first possible trigger, at the firstsigns of economic situation improving, priceswill go up. Developers are giving good bar-gains even to individual buyers.

There are some things that will work in yourfavour while bargaining. While those looking tobuy should bargain for good rates, they should

not hope for the developer to offer it to themThere is very high probability that you can gediscounts. In a market like Mumbai, a discounof even five per cent is good. In other marketsyou can get 10-15 per cent or even 20 per cent,says Sanjay Dutt, executive managing director (south Asia) of Cushman & WakefieldBuyers with pre-approved home loans in handare in a position to bargain for a better price. Infact, simple things such as going with youfamily members and with a cheque book tmake the downpayment will show you are serious buyer and ensure good discounts.

Since October-January is considered anauspicious time to buy property, this is whebuilders offer discounts on the price or giv

benefits such as stamp duty waiver or freebiesuch as kitchen cabinet or air-conditioners inthe house. So, if your builder is not offering anyof these facilities, you can bargain and ask himto reduce the price to that extent.

If you are looking to buy a property in apremium project, going with an up-front payment will ensure you get discounts. The retaimarket is largely broker-driven. So if youapproach the builder directly, you can straightway ask for a two per cent discount on thprice. You can also ask to include the loadinand ask the builder for a discount. Loading ithe carpet area (the actual usable area of thehouse) minus the super built-up area (nonhabitable area such as staircase, veranda etcIn Mumbai, Thane and Pune, the loading i40-50 per cent; in Chennai, Bangalore andHyderabad it is about 30-35 per cent, while inGurgaon it is 35-40 per cent.

Compare carpet loading factor and amenities cost. Builders have a decent spread andnow they are willing to sacrifice some of it,says Moorthy of RBS Financial Services.

Waiting period

According to Dutt, the good time to invest inreal estate is between now and March 2014the festival period starting with GaneshChathurthi and ending with Gudi PadwaThere is also a good chance of getting attractivdeals in land and residential apartmentbecause of the market conditions, with lowesales and new supply hitting the market.

Once the general elections are over and theris some political and economic stability, the window of opportunity will be over, says Dutt.

In fact, with harder rules on projecapprovals, land acquisition and taxation onproperty coming in, developers will have toraise prices to stay relevant in the market andsolvent in their businesses. However, there arenough existing projects and inventory withmany builders, which will have to be clearedbefore the impact of the Land Acquisition Bilcomes into play.

TO GET AGOOD DEALON

YOUR HOUSE:| Convince the builder of your intention to buy

| Go with your family and carry your cheque book;

be prepared to make immediate downpayment

| Bargain since the builder will not offer discounts

up-front

| Factor in loading, freebies like free kitchencabinet or air-

conditioners, waiver

of stamp dutywhile asking for

discount

| Have a pre-

approved home

loan if you can

Not desperate tobuy? Defer

u may be offered discounts and freebies but property pricesuld fall if you wait for a few more months

WHATS ON THE MENU: Since October-January is considered an auspicious time to buyproperty, this is when builders offer discounts on the price or give benefits such as stampduty waiver or freebies such as kitchen cabinet or air-conditioners in the house. So, if yourbuilder is not offering anyof these facilities, you can bargain and ask him to reduce theprice to thatextent

COOLING OFF

Source: National Housing Bank Residex