"If you want to invest in property, this is the best time. Property prices are reasonable and the chances of an upside in the future are greater as compared to other asset classes," Maharashtra Chamber of Housing Industry (MCHI)'s president, Pravin Doshi, told PTI.
With the stock-market in decline and commodity prices volatile, property has emerged as the best asset-class for investment, Doshi said.
"Home loan rates are only marginally higher than inflation. Investing in property will give a better utilisation of the Rupee," he said. Inflation today stands at a 13-year high of 11.42 per cent and with global oil prices flaring up, the chances of it rising further are high, he said.
"With inflation rising, every Rupee a consumer spends buys less than what it did the previous day," Doshi said.
In these circumstances, returns on investments in other asset classes cannot be assured, but investment in property will at least ensure that the investment does not get depreciated, he said.
Here it might be noted that even bank deposits are not proving as attractive as before, as the interest rates banks offer do not help investors in beating inflation. It is only in the last week that several banks have started increasing their deposit rates.
While deposit rates in the range of 9-9.75 per cent might succeed in attracting some depositors, Doshi said that with property prices now flat, investment in this segment would yield better returns.
Home loan rates have increased in the last few weeks but they were still in the 11.5-12.25 per cent range, which was reasonable. "I have even heard that loans are available for 11 per cent," he said. Besides, with housing a priority sector for the government, home loan rates would not rise exorbitantly.
The MCHI president admitted that there might be some marginal decline in property prices but said that they would eventually go up which would help the investor in beating inflation.
"There may be some marginal decline in property prices but eventually they would go up. This will help the investor in beating inflation," Doshi said.
When asked whether it would not be better to wait till end-this year when inflation was expected to decline, Doshi said that "while this was one factor that could be considered", international prices of oil would continue to drive inflation.
"Nobody expected oil prices to increase to this level. They have doubled in the last 12-months and there is speculation that oil prices might even touch the $200-mark.
In such a scenario, investments in the stock-market and commodities may not yield desired results," Doshi said.
According to him, the monsoon season normally did not witness much property-buying as people were busy with other activities such as school and college admissions for their children.
"Property-buying normally occurs around Diwali and the festival season," he said, adding that this was another factor which made the property sector an attractive investment option now.
Inflation: The silent killer!
