Apartments Rental is soaring up in Gurgaon indicating the Trend Reversal

Apartments Rental is soaring up in Gurgaon indicating the Trend Reversal

After the end of the festive seasons, the real estate market of Gurgaon witnessing the ebbing interest from the buying communities and most of the buyers have turned away from the market due to steep rise in property prices post recession. As a result the transactions related to sell and purchase in comparison to previous month have gone down. Contrary to this the rentals are constantly moving up, which is indicative of the fact that buying decision has been changed and those buyers have opted to remain as tenants under the self made conviction and belief that the property prices will correct sooner or later and there is now a popular perception emerging for a trend reversal, which may bring the prices closer to their budget, is more an illusion than a fact.

Recently, the hardening of interest rate towards home loan and withdrawal of teasers by the various banks besides fixing the maximum home loan funding up to 80% of the capital value have acted as dampener for buyers, as for most of them the loan could only get them the ability to own apartment or a flat. The minimum rental for a three bedroom standard apartment last year on Sohna Road was Rs 18,000 per month, while the rental of the same apartment this year has gone up to Rs 25,000 per month. What mostly people did last year, that they shifted to rented accommodations and at the same time they booked apartments in remote locations of Gurgaon at a price almost half of the market rate of "ready-to-move-in-apartment" available on Sohna Road or Sushant Lok III, intentionally to earn profit after paying upto 30% or three instalments of the capital value of booked apartments, which would help them in generating more capital they could hedge their rental expenditure as well as they would enhance their purchasing power. In a worse condition, they could at least console themselves for owning an under-construction apartment in a good project although remotely located, but at least they would say to themselves for sure that, something is better than nothing.

When the price shoots up and goes beyond the affordable limit, the rental value also rise and after a period of 2-3 years reaches to a level, where in the capital value of the property which two years ago seemed to be unjustifiable, become attractive out of sudden and thereupon trend reversal sets in with buyers get active hunting for apartments, subsequently demand gets more in volume. Consequently, the increase in rental value down the three years' time, shall act as precursor to for increasing the demand of properties in Gurgaon, irrespective of the fact that home loan is costlier or supply is opening up quite frequently. So, for those looking for owning residential apartments in Gurgaon must buy sooner than never, as any time is good time to invest or buy properties in Gurgaon, for this one should not buy property only for investment but for living and there should be a time horizon of more than five years, without any speculative mind set, then only real estate will turn out for you the real asset.

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