Khaleej Times: Best Time to Invest in Indian Properties

THE INDIAN Property Show, being held at Dubai’s Airport Expo, East Hall, from today, is one of the largest and most diverse exhibitions of Indian properties, with participants from all over the country.

The three-day event is being organised by the Sumansa Group. It will also feature seminars and conferences, and legal advisors will be on hand to help visitors get their questions answered. According to Sunil Jaiswal, CEO and president of Sumansa Group, this is probably the best time to invest in Indian properties. Jaiswal provides 10 reasons why this may be so:

‘Crash’ is another word for ‘Sale.’

What would happen if the supermarkets started saying ‘Crash’ when they meant sale?

Would you find people running around the supermarket screaming ‘arrghhh…There’s been a potato crash?’ No, of course not. Isn’t it the same with property too? Right now, properties are on sale. And what do you do when things are on sale? Buy.

‘Sales’ don’t last forever.

At some point, demand will be stimulated. There will come a point in which the “average” person stops being afraid of the market and starts to see that there are some good bargains around.

This is when the sentiment changes and we start the whole boom / bust cycle all over again. Fun, isn’t it? Well only if you know what’s going on and are “making hay while the sun shines.”

In 10 years you can look back and say “Wow… I can’t believe I bought – for only Rs. –” and everyone one else will say … “You were lucky.” I say you were smart.

The demand hasn’t gone… it’s delayed.

Houses are not like fruits. If you need to eat, you have many choices. For instance, rather than having a banana you could have an apple. If you need a house, you need a house. There are no options. (Sleeping in the park is an option… we’ll deal with that later). People are waiting for the market to “recover”, and when it does, all that “stored” demand will be released and prices will go up.

Everyone has ‘Property Amnesia.’

People forget. It’s human nature. Do you remember the last crash? Was it all doom and gloom? When was it? How much did prices dip? How long did it last? More importantly, are prices today more than they were before the last crash? So what’s so exciting about this? It’s all going to happen again. After the crash there will be a boom.

Interest rates are going down

The government tries to control the market with interest rates. Rates go up to curtail demand, and rates go down to encourage and stimulate demand.

At the moment interest rates are going down, and it won’t be long before the effect will be seen and demand stimulated. So what will happen then? Prices will go up.

People don’t stop having babies

Just because the market is down does not mean that the population stops growing. Here’s an amazing fact: by 2050 India will be the most populated country in the world with an estimated population of over 1.6 billion people.

Between then and now that’s an additional 1,000,000 per month. That’s more than the entire population of Greece every year. Think what kind of effect will that have in the long term? Prices will go up.

Every property is now 22 per cent cheaper Compared to a year ago

Today’s exchange rate means that every single property in India is 22 per cent cheaper. That’s a saving of over Rs1 million on a property of Rs4.8 million. Or put guess what? Everyone needs a house. If people are not buying now, it means they are waiting.

The demand hasn’t gone, it’s just been de another way, it works out to be your EMI payment for 22 months. Property is cheaper already (even without any price reductions). And that’s another reason to buy now.

Favourable prices.

Many developers across India have already reduced prices to stimulate demand. Mantri, an A grade builder, has just launched a new project in Bangalore that is around 25 per cent cheaper than other developments in the area and 50 per cent below prevailing prices of finished property. If you take into account a favourable exchange rate, and reduced prices, property in India can be as much as 30-50 per cent cheaper. If you ask me, that’s a good deal. Remember, prices will not stay low forever.

Everyone needs a roof

How many people do you know who like sleeping outside? You have to agree that no matter what happens, property is always in demand. It’s a basic necessity of life, just like eating and clothing.

Just because people stop buying, it does not mean that they are going to sleep in the park, they will rent, which is good news for investors too. The demand for property will never disappear. In fact, it’s set to increase (remember the population numbers?)

Think long term

Markets go up and down, that’s a fact no one can change, as it is a law of property. But low prices, as we have seen, are only temporary. On average, prices go up 10 per cent per annum (including the highs and lows). Remember prices go up long term. Fact. What would you rather do? Buy high and sell low or buy low and sell high? Think long term.

In summary:

I hope you can see why I feel that it’s always a good time to buy for the ‘smart’ investor.

But you have to plan long term. In two years will the market have ‘recovered’? I think so. Does it not make sense to pick up a ‘bargain’ now? Well, I’ll leave it to you to decide if you should.

However, I’m out there buying.

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