Conventional wisdom: If you are buying your first house, don't try to time the market.

The argument: Even if you are entering a high interest rate scenario, over a 15-20 year period, there will be cycles when rates will come down.

But, then, what can one do about spiralling property prices, especially in cities like Mumbai and Bengaluru?

If one were to believe builders, realty prices will only go up.

"Close to 500 projects haven't taken off because of various pending approvals.

So, demand still exceeds supply and we have been able to hold on to our rates," says Sunil Mantri, ex-president, Maharashtra Chamber of Housing Industry and chairman, Sunil Mantri Group.

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However, even he agrees that once project approvals start, the glut in supply could lead to pricing pressure.

On the other hand, the burgeoning debt on the realty company's balance sheets and consistent pressure on their stock prices tells another story.

In addition, decisions by the Supreme Court in the case of Noida Extension and the recent penalty by the Competition Commission of India on DLF, gives the impression that there is considerable pressure on this sector.

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Strategy

No wonder, some experts believe postponing buying for the next six to nine months could help enter at lower levels -- by at least 15-20 per cent.

"What will also help is that interest rates are at their peak and are likely to move down in the next six months, even if there is another hike," says Sunil Rohokale, executive director, Ask Group.
Sales are anyway down.

A number of reports have pointed out that in cities like Mumbai, property registrations are down as rentals are going up sharply.

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The gap between the customer's affordability and reigning property prices has widened, making purchases difficult for customers.

"The slowdown in sales is evident.

"Normally, projects that should be sold out within 30-odd months will now take around 72 months. This will impact the developer's cash flows," says Pankaj Kapoor, of property research firm Liases Foras.

Perhaps the first signs of a fall in price are already showing. 

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"Six months back, no builder would be willing to budge from the rate he had announced.

"Today, they are open to negotiations, even if it is a reduction of just Rs 200-300 per sq ft," says Wali Chaudhari, proprietor of Pyramid Consultants, a property brokerage firm. He said one could afford to wait if not getting the right deal.

Anand Narayan, national director, Knight Frank India, the property consultants, believes that while things are bad and could go worse, buyers could get good options in cities besides Mumbai.

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"Sales have slowed, though the liquidity issue is not as widespread. It may become acute in some time.

"Developers are already offering some discounts. But I see little room for prices to drop in projects that were launched earlier.

"Doing so would mean offering prices lower than what existing customers have paid," he said.

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Outside Mumbai, there are fewer affordability issues in Gurgaon, Pune, Noida and some other places.

A large segment still has the option to buy within the city perimeter. Pricing is better there, though there has been a rise across the country.

Conventional wisdom often goads customers to prefer purchasing property instead of staying on rent.
But, given the high cost of purchase, waiting makes sense.

Home loan rates are at 11 per cent, property prices have risen 27 per cent in a year in cities like Mumbai and the loan to value of 80:20 means the dice is heavily loaded against the buyer.

Adopt a wait-and-watch policy.