Luxury Villas, Flats, Homes - Should you buy now?

Everyone is talking of an imminent correction in real estate market but when is it coming? And then, some people are expecting a bull rally in stock markets to begin by Diwali. If that happens then how can we see a correction in realty market? Will sentiments differ for the two?

My analysis is that markets are continuing to be cautious for some time now. Deep corrections from these levels are far-fetched thoughts. Another 20% correction in stock market from 13k levels even if it happens would happen because someone selling like crazy at such levels has actually gone crazy somewhere else (read: Land of the Subprime).

What I feel would be a good buy today is real estate. Liquidity has dried out. Buyers as well as sellers are few. Advantage is in the hands of the people with power to buy whether by cash or by power to borrow. And my bet would be on residential as it is easier to get it financed and easier to turn it into a money making asset as compared to commercial where there is a lot of skepticism. And then there are tax benefits too (follow this link for tax benefits).

Resale or Original booking? Well, lots of developers are willing to fund the interest portion as of now for any booking received as a result of no loans available to them in money markets. so, they arrange a home loan to you and are willing to fund the interest for two years (which is at 12-13% as compared to 20% plus being available to them through banks). Do bargain to avail of tax benefit on the same once you get the possession.

Resale: Well, whoever is willing to sell is surely not finding enough buyers and so you can easily get a cool bargain and then you get to stay in it immediately or you can put it on rent and reduce EMI burden.

So, whether stock market or real estate, choice is yours. All I can say is that timing is tight.