Real estate is experiencing a rapid growth all over the country. The boom is seen especially in the suburb and peripheral areas of the Metros. With many property developers constructing residential complexes, there is immense activity in the real estate sector, especially the budget market. Many convenient home loan facilities provided by various banks have made it easier for people to purchase houses. The real estate market today is more transparent and the information is easily accessible, giving investors a scrupulous insight. However, even with trouble-free financial aid and in-depth knowledge of the real estate market, buying property is not an easy task.

Before making an investment in real estate, certain criterion should be considered. The investor should focus on the house loans that are proportionate to the other expenditures like education, medical expenses, etc. The locality of the place also is a significant factor while buying property. Since property is usually a long-term investment, one should look at the resale value. The resale value of property determines its appreciation over the years. Before buying property, it is important to access its value as compared to the existing market value.

With a flow of global investors entering India, there is enormous demand for commercial buildings at affordable prices for office buildings, businesses, retailers etc. Commercial properties are rated on the basis of their location, infrastructure and commercial viability. Investors prefer built-up spaces to suit their cost advantages. From the real estate perspective, Delhi, Bangalore, Kolkata, Gurgaon, Chennai, Mumbai, Chandigarh,and Hyderabad are the most coveted areas for investment. There is a spurge of foreign builders investing in property development. Morgan Stanley’s real estate division made an entry into Indian real estate market with an investment of $68 million (Rs.300 Cr) in Mantri Developers. The first real estate investment after the government opened up foreign investment in development and construction, a few IPO’s of the real estate industries and many in the pipeline will enhance flow of funds in the real estate market.
The demand for property in India is skyrocketing and this is the best time to invest in property here. A few points to be considered before investing -

LOCATION: it is the primary determent for a good investment. Is the property in a location that has scope for appreciation, is the locality already a prime one or will it soon become one? Is the neighbourhood advantageous? A sound investment would be in a location that is progressive and has scope for increasing in value over time.

ON TIME DELIVERY: Does the builder have a reputation for ontime delivery? Very often, projects overshoot the promised deadlines. This means loss of money, since the delays are expensive, and pile-up of other costs such as rentals and EMI etc increases.

CARPET AREA: Does the investment ensure highest carpet area – a point often overlooked. Mantri pioneered the concept of selling on highest carpet area by which you not only get more usable living space, but also pay less per sft for the same.

OCCUPANCY RATE: One aspect that needs to be looked at while investing is whether occupancy rate is high after possession of the property. Many projects have numerous unoccupied flats and begin to look like ghost towns. Over time this brings down the perceived value of the property.

CARE POST POSSESSION: The support systems within the project would also determine whether the investment is good. A project where maintenance, rentals and security are professionally managed and reliable would automatically make for a good purchase, since these are critical aspects that people look for.

LEGALITY: Always ensure that the documents are clear and marketable.

The property boom is certainly not deflating. It will remain steady for at least the next five years, according to reliable real estate companies. There has been no dearth in the demand. The IT industry has not shown very definite signs of a slump, and many big names are still plying towards India. Many projects of reliable brands such as Mantri have no difficulty in selling.

With bank loans becoming an easier task than before, with salaries showing better figures than before, with younger persons aspiring to own homes, and with DINKS on the rise, the demand for homes is not about to wane. Most homeowners have gone the home loan way, as this is quite manageable with current salaries.

No matter where the property is located — high-end localities or middle class — appreciation of the property is on the rise. Stagnation of prices in today’s scenario is a rare phenomenon. Shrinking real estate, rising new homemakers, new industries emerging, are all factors contributing to demand for houses, and appreciation of property value.

A home is something that has to be made, not bought

Sushil Mantri

CMD, Mantri Developers Pvt. Ltd.

Source:DH Reality-19-01-07