While in 2014, India was dealing with inflationary problems and home loans were hovering around the double-digit mark, the number has subsequently dropped to a somewhat reasonable 8.35 per cent and has hinted at a climb back.
Tamil Nadu was also hit by the double reform measures of demonetisation and GST. With passing of time after these two measures, the Real Estate Regulation Act is in force to protect consumers from delays and poor-quality products or land title. All these add to make for a robust market place.
Navin, Director of Navin's, says, “Over the past four years, what has not changed much is the price point. With the exceptions of certain negligible micro markets (which were either not ready for real estate development or were overpriced), the markets have managed to hold on to prices over a long four-year cool-off period. Given that micro-markets like Medavakkam, Vengaivasal, Porur, Moolakadai, Vadapalani, Valasaravakkam, OMR Zone 1 (Perungudi) and OMR Zone 2 (Thoraipakkam, Karapakkam) in Chennai have managed to hold on to prices over the period, it points to reasonable absorption even in stressed market conditions. When the market revives, as it has in the past and as it will in any growing economy (India is still growing at about 6.5-7.5% year-on-year) provided the right economic climate, these micro markets are the ones to watch out for.”
According to Navin, any state with the right development policies and factors (which Tamil Nadu has in abundance) and any city that has the infrastructure (where Chennai shines in comparison to Bengaluru, Pune or most other Indian cities) and support system (the new influx of about 15 million square foot of Grade A offices in and around OMR over the next few years) only points to strong growth rates in the medium term (3-10 years). He says, “The government from its end has introduced a credit-linked subsidy scheme, under the PMAY that will benefit first-time home buyers up to a sum of about Rs 2.6 lakh. This scheme is expected to end this financial year.
Additionally, financial institutions offer certain innovative schemes such as 5 per cent down 90 per cent loan (80% in case of above Rs 30 Lakh apartment) and 5 per cent at possession schemes to help buyers make their big investment which is backed by a real asset. Several factors point out that now is the best time to invest in the real estate market. But, investors are encouraged to take the plunge while taking calculated risks.
One needs to exercise caution while selecting locations, projects and developers.” Though location is a key parameter, the choice of developer is also important. Navin says, “While RERA does protect consumers, it is a law that is still nascent and will take a few years for it to be flawless in its execution. It may be wise to select a developer who is known for quality and has always delivered on time over a few business cycles. This will ensure that your expensive investment is safe and gets you higher sale price and rentals when they are put up on the market. Besides, they will not cost you a bomb in long-term repair and maintenance costs.”