Thursday, 8 October 2015

Clear optimism amid falling prices

Property prices are falling since the start of 2015 and continue to fall in the 3rd quarter. There is also a decline in sales transactions within the real estate sector. In Q3 2015 apartment prices fell by 3 percent compared to the second quarter. Villa prices have also reported a downfall in the first half of 2015. Rental prices are however not seen any major fall, a mere 1% decline has been reported in Q3 of 2025 which is a negligible number.

Sales are rental prices do not necessarily follow the same trend as there are different factors influencing the two. Prices depend on supply- demand, investor sentiment, economic growth and various factors while as rental prices majorly depend on the supply demand fundamental. The market is going through a challenging phase as investors are adopting a wait and watch approach. This slowdown can be a beneficial time to buy for investors as in this state of the market investors can get some good deals, the investors are still waiting as they wait for the prices to come further down and buy property at the lowest price possible. There are some major projects underway and a lot of residential inventory to  be released, though the actual number of the inventory has been exaggerated, developers are also looking into the possibility of delaying the release to create a balance between supply and demand and the market gets enough time to absorb the currently available inventory. The current slowdown indicates a correction which has been triggered by efforts made by the government and the Land apartment, these include the federal mortgage cap and doubling the transfer fee, and these efforts have been successful in eradicating speculations and flipping of market that results in over heating of the market. After implementing these cooling measures the slowdown was expected however certain external factors also affected it a little further. Despite of the slowdown the real estate sector is positive of an upward trend as the infrastructure projects needed for EXPO 2020 will create a huge number of jobs and other positive factors like the influx of capital from troubled countries in the region will help the real estate sector create more activity.

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