The authors are Shobhit Agarwal (left), National Head - Investment Services and Deepak Sankhye Manager - Investment Services Trammell Crow Meghraj Property Consultants. 

With property prices hotting up over the last year, most consumers are waiting to make their next move. Property consultants Tramell Crow Meghraj feel that while a correction is due, they hope that a clear trend will be seen in the next 6 months.

Jairaj Chulani asked: What do you expect from the Commercial properties in Mumbai , more specifically in areas like Andheri, in Malls and High Street Shops. Are these going to fall in the aftermath of the fall in the Stocks in India, and why? I have been given to understand that a fall of 10 to 20% is most likely in the properties that have gone up by 100% during the past one year.
 

The correlation between the stock market and the property market is marginal enough to be insignificant. While the stock market is driven by investors on a desire-to-earn basis, the property market is driven by end users on a need-to-use basis.

In areas like Andheri, there has been a discernible slowdown. However, retail is as always subject to demand and supply. Rates of prime space for suitably high profiled brands will not erode, while space suitable for lesser-known brands will see a correction that might amount to around 20% within six to eight months.

The HDFC Chief has stated in Business Line that the property prices in the country will drop in the next three to six months and investors will move out fearing the fall & only actual users only will be buyers. I am in the process of buying a home for my family and searching the same in Delhi (north). Will you please advice me whether I should wait for the fall in the prices of real estate in Delhi to get a better bargain for myself, asked B.L.Agrawal.

In India as of today, the dominant trend is huge demand-supply mismatch in housing sector. This would indicate rising property prices in foreseeable future. But, at the same time, the Government intends to keep housing within the reach of the common man. This is clearly evident by recent curbs on public sector banks regarding interest rate hikes. This finance ministry move intends to stabilize the market artificially and might result in property prices not falling. But rising interest rates will certainly put downward pressure on property prices. This puts the property market is in a phase of uncertainty. So it is prudent to wait and watch. This would apply to any area and particularly, areas surrounding Delhi that are overheated. We hope a clear trend would emerge within next six months.

Trammell Crow Meghraj Property Consultants will answer all your property related queries. If you have any queries on investing in property, mail us at property@moneycontrol.com.

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