Should you invest in realty, gold this Akshaya Tritiya?
Should you invest in realty, gold this Akshaya Tritiya?
Akshaya Tritiya is believed to be very auspicious as per the Hindu calendar. There is a belief that purchase of an asset, be it gold or property, will usher in prosperity. Hence, such festive occasions see a huge sales spike in property and gold. So, what do experts recommend on this auspicious day this time around?
What drives real estate demand on Akshaya Tritiya?
For decades, it has been observed that real estate investments in cities have always been high on Akshaya Tritiya due to new bookings, token deposits, possession of property and so on. Sarojini Ahuja, VP Sales and Marketing, Transcon Triumph, said the impact from demonetisation, Real Estate (Regulation and Development) Act (RERA) and Goods & Services Tax (GST) have tapered with time, making it a buyers’ market.
"Buyers want to make the most of festive discounts leading to improved sales. Further, the price stabilisation in metro cities is expected to attract fence-sitters and those who wait for the festive period to make new beginning by investing or taking possession of a property,” she explained.
Manoj Vishwakarma, Managing Director, Dotom Realty, too feels that investors show more of an inclination to close deals on this day. "The reason being various subvention schemes and attractive offers by real estate developers.”
At present, developers are taking the advantage of the current positive sentiments floating in the market and offering the best of the schemes, goodies and offers to attract the buyers.
Evaluate festive offers and freebies on their intrinsic value rather than their flashiness. Anuj Puri, Chairman, ANAROCK Property Consultants, explains: “You may not really need a gold coin or vouchers, probably already own a decent car, and a family holiday abroad may not make much sense if you would rather stay put and focus on your career for now. However, a free parking space, waived stamp duty and registration fees and maintenance-free periods do add to your savings, and therefore to the value of the deal.”
However, Arvind Hali, MD and CEO of ART, Affordable Housing Finance cautions against falling for sham schemes. “During the festive season, there are some sham schemes such as fixed guaranteed rentals, 100% buyback option by the same builder after a stipulated period of time, no margin required to finance the purchase of the property, etc to lure buyers. Be cautious as a buyer and do proper due diligence of the developer before purchasing.”
Don’t be an impulsive real estate buyer
According to Puri, the current real estate market is a buyer's one, with the buyer in the driver's seat. "This means that you can study as many projects as you need to before making a purchase.”
If you want to buy a home this festive season and do not wish to launch a time-consuming property search, enlist the services of a reputed property consultancy. “A reputed and ethics-focused property consultancy will cut through the clutter of offers and freebies and help buyers identify the properties which hold true intrinsic value for them. They can also help a buyer seek deeper discounts and easier payment terms,” Puri stated.
Understand your current and future finances before purchasing a property
If you are currently at the outset of your career, it may make sense to rent for a couple of years rather than buying at this stage due to attractive offers and freebies. Property prices are unlikely to grow significantly over the next 12-18 months, feels ANAROCK's Puri. "If your salary grows in this period, you will still be able to buy a good home two years from now.”
Offers on gold purchase during Akshaya Tritiya
Gold demand has been weak this year. That's why gold jewellers are offering freebies to its customers. Navneet Damani, VP- Research, Motilal Oswal Commodities, said jewellers are offering freebies like 100% off on making charges of certain jewellery and 1% extra gold on purchase of 100 grams. "Some companies are selling gold online with instant cash back offers, etc.” Every year there are several attractive offers for gold buyers around this festive day. The table below lists the performance of gold bought over the years.
Damani sees gold staying on the edge in 2018 given uncertainties surrounding US government policies, trade wars, US President Donald Trump’s comments on the dollar, possible Fed rate hike, US attack on Syria, and tension between the US and North Korea.
VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services, sees any of the above triggers resulting in sharp correction in equity markets, which in turn will lead to a flight of capital to gold. "That said, we don't see a sharp spike in gold prices this fiscal. So, only calibrated buying is recommended now.”
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