One keeps hearing of the ‘waitand-watch’ or ‘fencesitting’ syndrome on the residential property market, which basically means that a significant number of people who want to buy a home are not doing so.
Property buyers tend to wait and watch rather than buy for two or three reasons. One would be that they are waiting for a ‘price correction’ — a meaningful reduction in the prices developers quote for their properties. Regardless of whether their hopes are realistic or not, this fence-sitting’ dynamic is a definitely a fact.
As per Ashwinder Raj Singh, CEO, Anarock Property Consultants, “Buyers may also be waiting for lower interest rates on home loans. This is only partly true. While they certainly play a role in overall buyer sentiment, especially in the affordable housing segment, lower interest rates alone are not a sufficiently compelling rationale for aspiring mid-range housing buyers to abandon their ‘wait-and-watch’ mode.
If, however, the lower interest rates coincide with a hard discount or some other money-saving offer, many people will certainly come onto the market with a firm intention to finally buy a home.” Buyers may also ‘sit on the fence’ if the city they want to buy a home all because of the prevailing political turmoil.
A hesitation to invest in a property for this reason is obviously beyond the powers of the property market to address, and will usually change only when the core problem is resolved. Singh elaborates, “Those who wait and watch for a price correction engage in a calculated risk at best. Such fence-sitting is often the result of confusion rather than certainty. A buyer may have been receiving inputs from many different sources, some
of which predict that property prices will come down soon. If they do, the buyer would have incurred a loss by buying too soon. If they don’t, the buyer would have missed the optimal ‘entry point’, and certain flats which were shortlisted earlier may suddenly be off the market.”
The question is whether one should attempt to time the market. The answer depends on who is asking the question. If an investor asks it, there are still at least two answers — wait and watch (prices may reduce in your location) or buy now (your identified location will not correct, only appreciate). If a first-time home seeker asks it, the answer would be, “buy what you can afford, when you can afford it.”