Is this the Right Time to Invest in Property?

Recently, one of my clients had an interesting question: “With the Euro crisis still unresolved, would this be the right time to invest in property?”

My answer to this query was very simple. I told him that the situation is like a 200ml glass containing 100ml of water. Some people may view this as ½ empty glass and others may view it as ½ full! The fact remains that 200ml glass contains 100ml of water and half empty or half full are only our responses to this situation.

Similarly Euro crisis is a particular economic situation in that particular zone. Some may view it as a situation which may adversely impact Indian economy and thereby depreciate property value and others may view it as an opportune moment as the funds will flow into developing economies of BRIC countries.

Yes, India has moved from being a galloping economy to a trotting economy for the moment. Several dark clouds loom over the economic horizon like the current Euro crisis, slowdown in world economy, governance issues, political climate, etc.

The silver lining in those dark clouds is that economies / businesses are driven by basic instinct of survival!  An ailing Euro crisis will trigger flow of investments into developing BRIC economies. People still continue to prosper and improve their quality of life.

There have been several economic cycles of highs and lows in the past. The Indian economy and the credit system are robust enough to withstand the cycles without significantly affecting the real estate industry unlike in the US where it was exaggerated mainly due to sub prime factor. In India, there has only been a slowdown in the volume of transactions that take place during the down cycle which is understandable.

Hence there is no better time than now to buy a dream home or invest in properties with a long term perspective! However a short term investment may need to be a little circumspect and also may come along with a higher risk tag.