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Real Estate in Gurgaon experiences a high this Navratri season
To look into a country's economy- whether it is improving or not can simply be done by peeping into it's real estate prices.With the economy slowing down, job losses mounting and salary increments pared to the bare minimum, the real estate sector found itself in all sorts of difficulties in 2013.

High property prices and interest rates on home loans also took a toll on affordability. All these factors led to the low demand for housing during this period. For once, however, the buyers enjoyed high bargaining power as builders sought to woo them with price discounts and other freebies in the second half of 2013. The developers too offered many attractive discounts and schemes to buyers.

The latter, however, did not respond to these offers with customary zeal. The home prices in most of the country are far from the bubble levels of mid-2000s, but if you drill down deeper to look at individual markets, one sees a different picture. When comparing house prices and affordability today vs the bubble years people make a critical error. That is they don’t “normalize” the bubble years metrics to account for the fact that the incremental buyer/refinancer used “other than” 30-year fixed mortgages.

In other words, they forget about the popularity of “exotic loans” and assume everybody always used market-rate 30-year fixed rate financing. Every real estate analyst is forced to used assumptions when forecasting the future prices of homes. Gurgaon, the Millennium city suffered a 20 percent decline. Market watchers said that the off-take, in both the residential and commercial housing, in major pockets of Gurgaon, slackened.

The macro- conditions were not favorable due to the downtrend in the IT sector, slowdown in the Indian economy and high interest rates.The year 2013 was also an eventful year for the Indian Real Estate sector with the introduction of a Real Estate Regulatory Bill and a Land Acquisition Bill in the parliament. According to data from various sources, property prices have seen a correction recently. But, is the real estate market headed for a crash, an event that many prospective buyers have been waiting for?

"It is the moment that every buyer longs for. Looking forward for the real estate prices to go down," said a local. Viewing the condition through a dealer's eye, pessimistic thoughts rule their minds. According to Nikhil Arora of the Arora Estates "Their is no improvement in the market and I don't even see it coming."

The on-going preparations for General Elections of 2014 have further affected the liquidity in the system. It is assumed that most of the buyers are waiting for the right time i.e. post elections for booking properties. Arun Garg of Ranil Infratech says "Investment market is working smoothly right now, let's see if the same can be said for dealers after elections. End users are waiting for the right time."

The silver lining is that most respondents, that included realty developers, contractors, PE funds, banks and financiers, are positive about the economic scenario and expect an improvement in six months. Neeraj from Green Estate quotes "Sentiments are positive. Buyers are coming in and we expect a rise in the market. Let's hope the realty pushes up". With the Navratris on a roll, the real estate developers see a chance to incur their losses. It is considered to buy or invest in property during Navratris. Real estate developers in the National Capital Region (NCR) are offering freebies and discounts to lure buyers in the Navratri (nine-day festival) that began on April 1. Offers vary from free parking and free power backup to free air conditioners and attractive payment schemes.

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