As we look at how the residential real estate market in Patna is behaving this festive season of 2015, developers in Patna and the consultants in Patna are on the same page while accepting that it continues to go through a slow time. Many developers in Patna still have their backs against the wall financially, and have been challenged to complete or show convincing progress on their under-construction projects in Patna.
Unfortunately, this fact has been overly hyped by the media, and even developers in Patna who are well capitalized and fully able to complete their projects have been tarred by the negativity brush. This has resulted in a drop in overall confidence from home buyers in Patna, who are worried that they will commit their money into properties in Patna which will not be delivered on time.
The National economy and therefore the state economy in an election year of state have not shown the kind of perk-up which everyone had hoped for in 2015. However, matters have definitely improved over what we were seeing this time last year. The CRM head of www.buysellrentpatna.in Manoj Kumar Singh says “the queries in Patna have increased thousand percent on our website compared to last festive season. Not ignoring the fact that our website is more established now; still the growth is significant. All in all, the market’s outlook is improving. The RBI’s recent interest rate cut has helped improve sentiment, which is an important driver on the real estate market.”
With this rate cut, the RBI sent an important signal to the market that inflation is under control, and that it is confident about economic growth. Such signals definitely have a positive effect on buyer sentiment. However, in terms of actual pertinence on property purchase, the impact may not be very significant in Patna. If property prices in Patna are in any case unaffordable, a marginal reduction in the cost of borrowing will not make a difference. The reduction in interest rates will have a bigger impact on buying behavior in less expensive markets, such as peripheral locations of Patna.
Though many fence-sitting buyers have been waiting for real estate prices in Patna to correct, it is unlikely that any large-scale correction is imminent. Corrections are very location-specific as well as developer- specific, and will happen where nothing else will work to encourage buyer activity. In locations of Patna where there is still sufficient demand and prices are more or less affordable, there will be no correction, while they will certainly happen in areas where affordability is a deterrent to buyer sentiment.
However, much is already happening to make real estate more affordable in Patna. Developers in Patna have been actively re-configuring their projects to align with market demand, in the process saving on costs and passing on the benefit to buyers. Also, a majority of the new housing project launches have been at lower rates than those of earlier projects launched in the same locations in Patna in such category projects.
If we take a step back from domestic real estate consumption and look at demand coming from across our state borders, the outlook looks very upbeat. Currently, non-resident Indians (NRIs) OR Non- resident Biharis (NRBs) are extremely active in investing into Patna real estate. In fact, NRIs are among the top three investor communities in the Patna’s property sector. Apart from their natural affinity to Bihar and the fact that NRIs see a higher intrinsic value on Patna real estate over property owned elsewhere, purchase decisions are also being spurred by the Indian rupee’s ongoing weakness against the US dollar.
It is at best a mixed bag of market readings this festive season in Patna realty market – but is it a good time to buy? Definitely, considering that buyers have never been more spoiled for choice – and, for that matter, bargaining power. Also, we are seeing hard discounts as well as offers to waive stamp duty and registration charges, VAT and service tax– all of which translate into an actual saving on the cost of the property in Patna. More than in many of the preceding years, this festive season is an ideal time to zero in on the best deal and make that dream home a reality.