Is it time to buy your dream home?

With the economy giving indications of a recovery, the question as to whether this is the right time to buy property has yet again surfaced.

However, the answer as to whether this is the right time to buy, is not a simple yes or no, but depends on a number of factors like whether a buyer is looking for a first or second house, for living or investment and if it is an investment, whether it will be a long-term or short-term one, etc.

If we consider two property hotspots in the country, Delhi-NCR and Mumbai, it has seen two booms and two slumps in the last decade. The ups and downs may continue, regardless of prevailing market sentiments, depending on the project, geographical locations and various other factors.

Although developers have launched a slew of 'affordable houses', the dimensions and specifications of these new offerings are lower than those of earlier apartments. Swayed by the highway billboards, television producer, Preeti Banerjee went on a house hunting spree.

What she was offered with the new affordable launches was not only a cut in the per sq ft prices, but also reduced size of apartments by almost 30-40 per cent. She soon realised that "The combined effect is that prices of these so-called 'affordable apartments' have not gone down, as low as they may appear," she cautions.

From a macro economic perspective, these booms and slumps predominantly affect active investors and traders in property, who want to make money on every deal they make. The dilemma of whether it is the right time to buy, is always there for those who are looking for their first home.

Even when the market was worst hit by the recession, there were good deals in the market for those looking to invest in property. If the fundamentals are strong, i.e., where the property has clear title, is in an area where growth is expected and where prices have already corrected, then one may opt for buying.

Realty companies assert that the prices have reached the bottom and will only move northwards, hereafter. "In a demand-supply mismatch scenario, the prices have to go up, unless there is a case of more land being released," says DLF spokesperson, Sanjey Roy. "Moreover, it is a myth that the buyers are staying away from the market. Even in the recession-hit market, in FY 2008-09, DLF managed to sell more than 8,000 flats," he shares.

All realty experts agree that the days of speculation are over. Property prices are determined by the fundamentals of demand and supply, added with civic amenities and growth potential of the geographical region. The demand in the market had skyrocketed when the economy was doing well, new jobs were being created and salaries were going up. The emergence of the suburban housing market gave people an opportunity to buy property at relatively lower prices and mortgage loans were available at lower rates.