Slow Economy - Advantage real estate investors in Patna

Buy Sell Rent Patna

Most middle-class people in Patna have been able to continue paying their EMIs and keep their homes with themselves in Patna. This is largely due to our conservative banking system, which requires banks to do multiple checks before allowing a home loan to go through for any individual in Patna.

The Indian economy has had another tough year in 2013. Inflation went as high as 7.52%, job opportunities reduced significantly across industries, the rupee saw steady erosion against the US dollar and market sentiments reached what was possibly their lowest point ever since 2008-09. And yet, things could be worse.

During the depths of the US economic crisis, entire American cities turned into ghost towns. Thousands and thousands of people lost their jobs and were reduced to living in tent colonies, trailers and on the streets. Banks foreclosed countless mortgages which the borrowers could no longer afford to pay. Homes were put on the market at ridiculously under-valued prices and still found no buyers.   The scenario is quite different in Patna. Jobs were lost, but the situation was definitely not as severe as in the US, where people not only lost jobs but also their pensions to the ailing economy.  Most middle-class Patnaites have been able to continue paying their EMIs and keep their homes. This is largely thanks to our conservative banking system, which requires banks to do multiple checks before allowing a home loan to go through. Also, Patnaites consider their homes their most important possessions, and therefore make paying their financial obligations towards them their highest priority.

What does all this have to do with real estate investment in Patna? A lot. One symptom of a recessionary economy is that people think twice - and thrice - before making any new high-value financial commitments. Since home purchase in Patna is invariably the biggest investment that most Patnaites make in their lives, they tend to be very cautious about doing so during times of financial uncertainty.   They will pursue their home ownership dreams when they perceive that stability has been restored in the economy - and therefore in their lives. Until then, they would often prefer to live in rented homes. This is also known as the 'wait-and-watch' mind-set, which results in reduced demand for homes during the period of insecurity. Because property prices in Patna are a function of demand, they tend to reduce in times of economic uncertainty because that is the only way to keep sales going.

This is the ideal time for property investors to pick up properties at lower costs and rent them out to “purchase-averse” families in Patna. When the economy improves, so will the appetite for home ownership in Patna. A rise in property prices in Patna will follow naturally, resulting in a tidy profit when the property is put up for sale.   It is not possible to ascertain exactly when property prices in Patna will reach their lowest point - and start picking up again after that.

However, one good indicator is the job scenario. When the industries that drive the economy start stepping up on hiring, the economy improves. Going by news reports, 2014 is going to be a year of massive hiring sprees for India's banking and Information Technology industries. This will mark the onset of economic revival - and therefore a pickup in demand for properties in Patna, which will signal a hardening of property rates in Patna.  

While the reduced sentiments prevail, developers and investors in Patna are still open to negotiation. Moreover, many of the new projects that were launched in the low economic period featured significantly reduced price tags. Is this the fabled 'market bottom' that every property investor considers the magical entry point? Impossible to say... but whenever it does come, it will not last forever.