Sachin Chaudhury, business head of Indiabulls Housing Finance, underlines the importance for home buyers not to be misguided by aggressive pricing by developers or be lured by freebies, but to undertake a proper check of the property and location, before making a purchase
"Negotiate with the developer, and you may come up with great discounts. Unlike our belief, discounts are available round the year," says Sachin Chaudhury, business head of Indiabulls Housing Finance Ltd. Mr Chaudhury feels that a patient customer, who does his research well, has chances of making a better purchase and driving a hard bargain.
"Aggressive pricing often misguides customers. Generally, the price quoted in the advertisement is the raw cost of the least preferred flat. There are hidden prices for parking, maintenance, service and stamp charges, so don't get a shock later," he says.
Mr Chaudhury addressed a seminar, hosted by Moneylife Foundation in New Delhi, recently, and provided several tips for home buyers.
Many customers fall for the lure of freebies. But every 'free' item/facility has an add-on cost that builders may not mention earlier. At a time when developers are reeling under high debt, it is naive to assume that they will give away anything for free. However, the crisis for builders may emerge as a boon for customers, Mr Chaudhury suggests. It is mainly because builders are more desperate to sell now, with the off-take having reduced dramatically in the last two quarters and the severe loan and liquidity crisis.
Better deals are also available at the time of group bookings, since that also saves the builders a lot of hassle. Moreover, a good bargainer can gain customised fittings, flooring, and so on, and can design a convenient payment plan too. "Even brokers and underwriters (who buy properties en masse and sell to the public) can offer you good discounts," he says.
What many people forget is that the price of the property also depends on the locality where it is situated. So instead of blindly going for fancy 'countryside', 'riverside' or 'eco-surroundings' projects, located far off, it is better to check out first. "If you want a home in a place you don't know yet, go there and check it out for yourself. Do not limit yourself to inspecting the builders' project. How much is that area liveable?" Mr Chaudhury asks.
Mohammed Aslam, joint city head - Pune, Jones Lang LaSalle India, supports these views. "Property rates are not decided on the basis of land value alone-the surrounding infrastructure adds to the value of a location. If you have chosen your location well and are in a progressive and developing neighbourhood, your home will appreciate in value over the years, only because of the overall conveniences it will provide to future buyers," he says.
Mr Chaudhury underlines that it is always important to know when to buy. "If transactions are very low and prices are decreasing in a high-rate scenario, postpone buying. Buy a property where buyers are available with less effort and they are ready to buy with a shorter wait. This indicates that the situation is stable. And remember, if the price of the property is more than 25 times the annual rent that you are paying, stick with rentals," he says.
Expect an oversold bounce which may take Nifty to 5,450
The market which saw listless trade in the absence of any triggers, ended flat with a positive bias on Tuesday, reflecting the small gains accrued by Asian markets today. The Sensex and Nifty opened at 18,016 and 5,385, respectively, and hit an intra-day high at 18,110 and 5,423 in the early afternoon. Oil & gas, auto, banking, realty and consumer durable stocks supported early gains. Also, Asian markets, which were weak in early trade, were higher in subsequent trade, supporting investor sentiments here. While the key indices were positive, the gains were marginal in the absence of any major trigger.
There was selling pressure from institutional investors after news about inflationary pressures that could impact economic growth. The market hit its intra-day low, lower than that of yesterday, at 17,934 and 5,367. But value buying came in immediately afterwards and the market closed positive. The Sensex closed at 18,012, up 19 points, and the Nifty closed at 5,395, a gain of 8 points. The advance-decline ratio on the National Stock Exchange was 642:744.
In the broader markets, the BSE Mid-cap index settled flat and the BSE Small-cap index declined 0.04%.
In the sectoral space, BSE Capital Goods (up 1.19%), BSE Consumer Durables (up 0.81%), BSE Bankex (up 0.57%), BSE Oil & Gas (up 0.20%) and BSE Healthcare (up 0.19%) were the top gainers. BSE Fast Moving Consumer Goods (down 0.94%), BSE Realty (down 0.58%) and BSE PSU (down 0.37%) were the major losers.
Larsen & Toubro (up 1.75%), Cipla (up 1.62%), Hero Honda (up 1.33%), ICICI Bank (up 1.27%) and Tata Steel (up 1.24%) were the top performers on the Sensex. Reliance Infrastructure (down 1.88%), DLF (down 1.84%), ITC (down 1.45%), State Bank of India (down 1.39%) and TCS (down 1.07%) settled at the bottom of the index.
The government is likely to miss the revenue collection targets during 2011-12, mainly on account of high inflation and moderating economic growth. "Inflation can affect domestic demand and thereby adversely affect GDP growth... and consequently our tax collection," revenue secretary Sunil Mitra said, during his address at the annual conference of chief commissioners and directors general of income tax.
Markets in Asia, with the exception of the Shanghai Composite closed higher, albeit with marginal gains, after the Goldman Sachs Group expressed optimism in commodities. Among Japanese stocks, Sony surged 2.7%, following an announcement that it expects to return to profits in fiscal 2011. The electronics major reported a net loss of 260 billion yen ($3.2 billion) for the last fiscal year.
The Shanghai Composite edged lower following Goldman Sachs lowering its economic growth forecasts for China to 9.4% this year, from 10% previously, citing recent weak economic data, high oil prices and supply constraints.
The Hang Seng rose 0.09%, the Jakarta Composite gained 0.20%, The KLSE Composite advanced 0.21%, the Nikkei 225 climbed 0.17%, the Straits Times added 0.08%, the Seoul Composite rose 0.29% and the Taiwan Weighted closed 0.10% higher.
Back home, foreign institutional investors were net sellers of stocks worth Rs293.56 crore on Monday. On the other hand, domestic institutional investors were net buyers of shares worth Rs194.22 crore.
A recent study reveals that fund managers have a bearish outlook for the equity market over the next three months. But most of them would rather retain their existing portfolio and not make any changes to their exposure to equities
A recent survey has revealed that fund managers have a cautious view of both the equity and debt markets. A majority of the fund managers (among 16 Asset Management Companies, or AMCs) who took the latest survey conducted by ICICI Securities in May consider the Indian equity market to be "fairly valued".
By the end of the year, most of these managers surveyed expect the Sensex to be in the range of 17,500-21,500, according to the survey. But for the next three months, the fund heads have taken a neutral to bearish view of the overall market, due to growing concerns over high crude oil prices and possible continuing monetary tightening by the apex bank.
With this current outlook of the market, most of the fund managers say that they prefer to maintain their current asset allocation and prefer not to make any changes in their equity exposure.
More than 60% of the fund managers, from the 16 AMCs that were surveyed, believe that mid-caps would be a better investment option than large-caps, over a one-year period.
With regard to earnings growth, these fund managers have a moderate view. But, contrary to market expectations, 44% of the fund managers believe that earnings would be in the range of 10%-15% for the year 2011-12. For the following financial year 2012-13, 62% of the managers expect earnings growth to above 15%.
A major fear factor for most of the fund managers is the high level of crude oil prices. Compared to other global risks for the Indian equity market, high crude oil prices peak at 88% as a factor for concern, whereas other factors like the European Union debt crisis and the Chinese slowdown just account for 13% each as causes for concern.
When told to rank their most preferred sector, pharma led the pack followed by IT and BFSI (Banking, Financial Services and Insurance). The saturated telecom sector and the cement industry were at the last of the list. Despite the fact that the Reserve Bank of India might allow new banking licences, fund managers were bullish on private sector banks.