TO BUY or wait - that is the question on HR manager Manasi Bhat's mind. Manasi and her husband are planning to buy a house in the central suburbs in Mumbai, sometime in March-April, 2009.
Like Manasi, many have already been waiting for several months in the hope that property prices will cool off and make their dreams a little more within reach. The good news is that 2009 is going to make dreams come true.
Outlook
Property prices
In the last few months there has been a high level of uncertainty - in jobs, in incomes and in equity returns. This is affecting people's spending and high rates are no longer sustainable. Property prices across cities have already started correcting.
Ghulam Zia, National Director Research & Advisory Services, Knight Frank (India) Pvt Ltd. says that the buying and selling of properties have gone down by over 80 per cent from the peak.
Prices are expected to fall by 35-40 per cent in next 6 to 8 months. And it would take 12-18 months for the rates to stabilise.
But while buyers were holding off purchases, builders were holding off completion. The real estate market today is at the risk of abandoned projects. So in this scenario, should you consider buying a house?
Home loan interest rates
December has already seen announcements by most leading banks about a cut in PLRs (prime lending rates) which will also bear on home loan interest rates.
Abitha Deepak, Head Content & Research, BankBazaar.com, expects that there will be a further cut in the Cash Reserve Ration (CRR) and hence the interest rates are expected to come down further by April, 09.
Should you buy a home in 2009?
Zia advises folks like Manasi to choose rental premises for a year, and then look out for a home after that. Rates would have become affordable by then.
And if interest rates are likely to dip a little more, then loans will also get cheaper. Having said that, if you are planning to buy a home now anyway, choose the floating rate option.
Photograph: Joe Raedle/Getty Images
on your mobile
On your phone browser type