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News & Views on Indian Real Estate

Wednesday, May 14, 2008

Fall in Home Prices in and around Metros expected

There is good news for all the homebuyers who wished to own a dream house of there own but couldn’t possess due to the skyrocketing property prices. If you are waiting for property prices to fall by the end of the year to buy your dream house in the city, you may be doing the right thing! Realty experts predict a 10-20% fall in residential prices in and around metros.There is respite ahead for people who want to invest in residential property in metros. According to experts, this segment of the market is set to witness a slide in prices soon. That's because over five million sq ft of residential space is under construction currently in areas in and around Delhi, Mumbai, Chennai, and Bangalore. They say a majority of this supply will hit the realty market over the next 6-12 months. Since there are fewer takers for residential property in prime locations right now, it could force to bring down prices. In certain markets the reason is oversupply. In certain markets the size of the market is very small and the number of projects that have been announced, or which are being sold in the market are much more. Secondly, there is an absence of investors in the market, so it's a purely end-user market. The stock markets have corrected, peoples' perception that they have lesser wealth right now, also effects the real estate market. Experts say the demand for houses in the metros has already reduced by 40-50% in the last few months. While investors and speculators seemed to have left the realty market for now, end-users continue to drive the market but they make up only about 30-40% of the total market size.

Vikas Bamotra said...

While the bears are ruling the stock market, there is a different asset class where the bulls are keeping away. Speculative investors in real estate market are retreating, at least in the Delhi-NCR region.
Some foremost developers based in the region say it is becoming more and more complicated for them to sell flats at launch stage due to lack of interest from speculators. This reflects on the inherent demand structure in the real estate market.

Anonymous said...

but at present time is good to buy the property at any where because before 2010 rates will be on very hike.

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