The property market is seeing a slow but relatively steady recovery in the first quarter of 2009 with enquiry levels growing and transaction numbers starting again.
The market has moved from virtually zero transactions in the later part of 2008 to a point where there is now cautious optimism among developers.
Why the change ?
First and foremost it’s market sentiment, people seem to be happy that the deals now on offer represent good value, and more importantly they don’t believe prices will fall further.
Added to this is the fact that interest rates have come down and EMI’s are therefore much more affordable.
Given the combined drop in prices and drop in interest rates, buyers are now some 30% or more better off than they were a year ago.
Recent numbers from the RBI show that wholesale inflation rate is down to the 2002 levels of only 3.03% (down from 5.69% at this time last year) Retail rates are expected to follow the downward trend as the year progresses.
All this has led to the central bank aggressively cutting rates with 5 cuts since October 2008.
It is considered unlikely that there will be any further cuts prior to the next financial year.
Borrowers can now lock in rates as low as 10% (IDBI) so property is again looking a tempting option.
Buyers are moving strongly back into the sub 30 lakh market where it is mainly driven by owner occupiers who in the main are working couples and families.The second quarter of 2009 should continue this trend.
The market has moved from virtually zero transactions in the later part of 2008 to a point where there is now cautious optimism among developers.
Why the change ?
First and foremost it’s market sentiment, people seem to be happy that the deals now on offer represent good value, and more importantly they don’t believe prices will fall further.
Added to this is the fact that interest rates have come down and EMI’s are therefore much more affordable.
Given the combined drop in prices and drop in interest rates, buyers are now some 30% or more better off than they were a year ago.
Recent numbers from the RBI show that wholesale inflation rate is down to the 2002 levels of only 3.03% (down from 5.69% at this time last year) Retail rates are expected to follow the downward trend as the year progresses.
All this has led to the central bank aggressively cutting rates with 5 cuts since October 2008.
It is considered unlikely that there will be any further cuts prior to the next financial year.
Borrowers can now lock in rates as low as 10% (IDBI) so property is again looking a tempting option.
Buyers are moving strongly back into the sub 30 lakh market where it is mainly driven by owner occupiers who in the main are working couples and families.The second quarter of 2009 should continue this trend.
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