The costs of constructing and financing a property are increasing, but it makes complete sense to buy now if you are looking for a home for yourself.  Acyclical change in home loan interest rates, changing demand supply equation and even tumbling stock markets set off a debate that throws up many views - is it the right time to buy property? Those looking for a house and property investors alike are exposed to a host of suggestions and views. Some feel anytime is good to buy property while others advocate a wait and watch strategy. But an analysis of some fundamental underlying factors that are a part of the property market will help potential buyers make up their minds.  Here are some fundamentals that have a bearing on the property market:  COST OF CONSTRUCTION  The recent months have seen an increase in the cost of construction. The prices of steel, cement and other basic materials have gone up. This makes it more expensive to build a home now. Those with a site and planning to build will see cost escalations throwing their budgets out of gear if they delay construction. The cost of transportation is rising thanks to the increase in fuel prices. The cost of labour too has seen a hike. So, as the months go buy, it gets more expensive to build a home. It will therefore make more sense to complete construction as soon as possible and avoid cost escalations.  DEMAND-SUPPLY EQUATION  Many analysts predict cyclical tilts in the demand supply equation. The single largest force that is driving the property market here is the demand from the IT sector. Also, it is estimated that around 12 lakh people from the IT sector draw around Rs 20,000 crores per annum in salaries. Some part of this is bound to find its way into property with the unpredictable and volatile stock markets. This, along with the growth expected in the IT sector makes the demand-supply equation dynamic and liable to shift at any time.  PREMIUM LOCATION  Property in a premium location is difficult to get when the demand is high. This is especially so in localities like the central business district. In emerging localities, it always pays to pick up property in premium locations, no matter what the outlook on the market may be. This is because, as the demand-supply equation tilts in these localities over time, the property will turnout to be a good investment.  INTEREST RATES CYCLICAL  Interest rates are determined by a host of factors. Inflation and other market forces play a role in the direction the rates move in. It is difficult to predict the cyclical changes and time them. Interest rates have moved from the seven percent levels to the 12 percent levels over just a few years. This upward movement will be reversed once the inflation rate cools. Liquidity in the system and competition among banks will bring rates down again over time. But the costs of property will not remain the same over the same period of time. So, while the interest rate may be lower in the future, the cost of property would have increased. How this works for buyers is difficult to predict. Invariably, over the long term, the increase in cost of property will negate possible gains from reduction in overall cost of loan.  Courtesy:- ET dtd:- July 18,