The property market is showing signs of maturity

A key difference in the residential real estate market of today and that of 2006-07 (when the market was at its peak) is that buyers are being more selective now. During the boom time, property prices were going up everywhere – whether it was an A-grade property or a C-grade one, whether in a tier-2 town or in a tier-3 town. It was only the euphoric sentiment that was driving prices higher. Now things are a little different. You see each property market responding to local factors also and there is no one direction in which prices or rents are moving.
There are pockets where prices are rising, others where they are stable and some where a correction may still happen. That, according to me, is a very positive sign and shows that the real estate markets are maturing and so are buyers. Because of the variation, now there seems to be a logic in the price rise or decline in a market. Another encouraging sign is that buyers have now also started looking at factors like infrastructure, and connectivity instead of just buying what they could afford.

Project delays, which have been of concern to a lot of potential buyers, are also likely to improve gradually. Developers have realised that instead of spreading themselves thin across the country they need to focus on key markets and improve their track record. The consumer too has got many platforms to raise his voice and, therefore, developers cannot afford to tarnish their reputation with delayed projects. We will now see developers speeding up delayed projects and sticking to the delivery date.

Another apprehension is that investors (rather than end-users) are coming back in the market. But I think the word investor is highly misunderstood. Investing is not a bad word. Most people think of only two broad categories — the end-user and the investor who is supposed to be a speculator. However, there is also that category of potential buyers like us who may have some extra money on their hands, may have got a bonus and who want to look for a second house. Most will do so by taking another home loan. These people, in all probability, will not look at selling their property in the short term and will stick to their ‘investment’. These are not speculators.