Pankaj Bajaj Eldeco - Role of DDA to Marginalize the Investment of Small Landowners

Unfortunately, the festive season is here.

Why Unfortunate?

In case you are looking to make an investment in the real estate you might be wondering whether the coming festive season is a good time to seal the deal or not, right?

Well, during this time usually what happens is that the barrage of real estate offers and discounts are released to woo customers during this period. Sadly, the real estate sector has remained under pressure for some years now, with the muted offtake, high inventories, and builders who are looking to offload some of their stock during the coming months this year.

The investment advisors and personal finance experts’ survey conclude that the real estate as a pure investment play may not be a good idea at this juncture. It is said that there is a huge inventory build-up that needs to be cleared up first in order to get the property prices to go up in a meaningful way.

Advisors say that though the sector has seen some positive movement in 2018, property prices are not moving up as much as investors wanted. However, property prices in the metros, which are taken as the benchmark for the overall health of the real estate sector, are still sluggish, to say the least, in-fact in Delhi NCR, Mumbai and Pune the prices are in the negative territory.

It is seen that the rising interest rates in the system would be a negative for the real estate sector. As it is known that the real estate doesn’t tend to do well during periods of high real rates, demonetization and RERA have dealt a body blow to developers who were excessively leveraged. A supply glut in the residential real estate market is also likely to keep prices in check.

While discussing his thoughts about the idea of investment Eldeco MD Pankaj Bajaj said 'the role of DDA will be essential to see as their Role will marginalise the small landowners.'

Although it is the perfect market for the end users, they can see the supply of the ready to move in flats at such interesting prices but not for investors, unless one has a really long-term horizon and the ability to select projects by developers with low leverage and a good record of timely delivery.

However, it feels that the discount offers back by cheap home loan makes the festive season a good time to buy a home. The offers during the festive period are fairly unique, competitive, one time and mostly customized to suit the target market. From a homebuyer’s perspective, this is one of the best periods to scout for their dream homes since these offers are annual. It is fairly encouraging to know RERA (Real Estate Regulatory Authority) and GST rate has made market sentiment positive, further boosting the confidence of the consumers.