Buying property in India has become a far-fetched dream for many. High property prices and high home loan rates are taking a toll on the middle income user. Country’s top banks like State Bank of India, HDFC Bank and ICICI Bank have hiked their lending rates to accommodate the new repo rates enforced by the Reserve Bank of India. This means added financial burden for the middle income and lower income home seekers who usually resort to home loans to buy property.
Financial analysts and market watchers say that this will curb the liquidity in the market. Property experts, however, are unanimous that this hike (which follows a significant hike in January 2008) will bring stagnation in the Indian property market.
Is it wise to buy property in India?
HDFC Managing Director, Renu Sud Karnad has written in one of her columns that the property market is stagnating and this phase will continue for next four months. However, she warns that a major price correction should not be expected. This means that property prices may mellow a bit but will resurge in a while. Hence, investors, who have surplus cash, could make the most of this opportunity. Also, this is the lean monsoon phase when property transactions are at the rock-bottom.
Real estate prices are poised to increase after the monsoons, particular in the festival season. Property buying and selling would take off then and property investors and property owners could make the best use of their land assets.
New trends for property markets
Indian property market is witnessing new trends like affordable housing and green homes. Many private property developers - including biggies like DLF group, Omaxe Ltd, Parsvnath Ltd. and Ansals group – have announced mass housing scheme in many cities.
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