The property market has been in the doldrums — property price and sales volume have been very tepid. Inventory levels have been high, despite drop in launches, and the secondary market has taken a severe beating in transactions.

However, data from the FICCI-NAREDCO-Knight Frank India Real Estate Sentiment Index for October-December 2017 shows that sentiment scores have moved to the positive zone after being in the red in the previous two quarters; future scores have also picked up and reached pre-demonetisation levels. So those buying for end-use can consider hunting for a good deal now.

New homes

Home buyers are in a good bargaining position with builders in many cities and localities. For one, developers are under stress to complete projects that have been launched.

Data from ANAROCK Property Consultants estimates that there are about 57,000 units in 170 stalled projects across the top seven cities in the country. They need cash flow as funding is an issue for many developers, especially the smaller ones.

To attract buyers, builders have been launching attractive schemes to provide flexibility in payment.

For example, buyers are promised that they need not pay EMI till possession. The EMI portion is covered by the developer. This can be a win-win, as the home-loan rates are much lower than the interest rates at which the builder can get funds.

Other things you can ask for are discount on GST being charged and no floor rise charges for high-rise buildings.

Besides reduction in payment, you can also ask for upgrades, additional car parking and waiver of clubhouse and other charges.

Secondary sales

Property transactions — land and homes — in the resale market have been hit after demonetisation.

Prices are typically lower for resale properties compared to new homes in the same area. Also, compared to new projects, they may also be imore centrally-located.

Sellers have been unable to close deals and are willing to be flexible, not just on the price, but also on other terms.

For example, buyers can ask for damage or fixtures to be repaired, the apartment to be given a touch of paint and the price of the reserved parking slot to be included in the final price.

Also, sellers in the secondary market now find that introducing a cash component is not easy or advisable .

Buyers can also ask for reductions based on the age of the building and other obvious drawbacks such as lack of parking space.

How to pick

As a buyer you must select your location to decide if a new home or a resale home offers a better choice.

Prices in central locations in the city may be higher due to better connectivity and social infrastructure such as schools and shopping.

However, price growth may be slow. On the other hand, emerging areas may have advantages such as more open space and less pollution.

In central locations, resale may be the likely option as many new homes may not be available. These homes may, however, lack many amenities that are typically offered in new projects.

So, you must understand the trade-offs and pick based on your need. With resale homes, you must ensure that the title is clean and there are no ownership disputes. With new homes, in states where RERA has been deployed, buyers now look for RERA registration and understand the exact state-level RERA laws before deciding.

There are many emerging areas where prices are still low and growth potential high.

For example, Wakad, Undri-Pisoli in Pune; Magadi Road and Horamavu in Bengaluru; Kalyan-Dombivali and Vartak Nagar in Mumbai Metropolitan Area; and Vanagaram in Chennai.

Besides the metros, smaller cities also have promising locations — Ajmer Road in Jaipur and Kalamaseery in Kochi.

All said, in the hunt for a bargain and just to be different, , don’t take on undue risk, unless you are an investor with a strong risk appetite.

For example, rates may be more attractive for incomplete projects, but the risks may not be worth taking, given the various other options available.

Instead, you can opt for ready-to-move-in homes and projects in advanced stages of completion.

The author is co-founder, RANA Investment Advisors

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