Despite hoping otherwise, the rising Sensex has not translated into sales for builders
Despite hoping otherwise, the rising Sensex has not translated into sales for builders
The rising Sensex has not only perked up investors, but has also energised builders. But real estate market experts have advised a realty check for the latter. Investors returning to the stock market will not necessarily translate into them investing in property, they pointed out.
Shobhit Agarwal, joint managing director (Capital Markets) at the real estate consultancy firm Jones Lang LaSalle Meghraj, explained that the real estate market is still not faring well because of a "recession of sentiments". "The negativity is purely psychological and not based on actual market potential, which is rather good at the moment. Buyers are waiting for a confluence of rock-bottom property rates, rock-bottom interest rates and added incentives. People are willing to take a risk with shares, but are not willing to do so with real estate," said Agarwal.
Echoed another expert, "Buyers are waiting for the prices to fall further." He added that job insecurity and pay cuts were the other factors keeping buyers away.
We shall overcome
However, builders remain undeterred. "When the Sensex rose last week, Realty Index moved up by more than 23 per cent, suggesting that now is the suitable time for purchasing real estate," said Rajesh Vardhan, managing director, Vardhaman Group.
Aditya Verma, business head, Makaan.com, added, "With the index in the share market going up, the real estate market is also making profits. Compared to January, more people are buying now, as the rates are affordable."
While Mihir Dhruva of Siddharth Builders echoed Verma, he also accepted, "The prices won't go back to the peak they had reached in 2007."
Buyer speak
While Khushal S, a software engineer, considers investing in shares a lesser risk than buying property, Shardul Kulkarni, a project engineer with an IT company, said, "I expect the prices to fall further with recession."
Gaurav Gupta, the operations head of a media company, said, "With high interest rates and lack of job security, I won't buy now."
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