India Property Auction : Reality Bubble - Is the Real Estate Booming (Fact or Fiction)

Has Real Estate become Unreal? Where is the industry heading?

A few days back one thing that dominated almost every conversation was real estate and more specifically hike in real estate prices. But now all those who talked about the hike in the sector have no option left but to keep mum. Where is the industry heading and where will it lead are the questions hovering around and haunting everybody be it a broker or a mid size builder or be it a potential buyer or an investor. As it seems that the industry is getting some cold waves every individual is pondering over the impact it’ll make on them.

Real estate is talking rather is seeing correction period in India. In many parts of Mumbai and at various other places like Pune, Nasik, Jaipur, Bangalore, Chennai and Hyderabad real estate prices are tapering off. In particular Mumbai has seen 20% fall albeit despite of this fall residential units are still out of the reach of middle class people.

Concentrating on Delhi NCR Region, would like tell my readers that just like rest of the country scene here is no good. Due to relatively low liquidity of real estate and high mobility of investor capital, the national capital and national capital regions are witnessing price correction. Experts had been expecting a 15-20 per cent drop in prices of property in Tier I city like Delhi where the prices had gone up rapidly during last 12 months. And now with the industry going through rough time prices in Delhi NCR have gone for a toss. Similarly in NCR Region like Noida property prices nose-dived and Gurgaon can be seen following the same path with a dip of 10-15% though for a short while only. In long run in Gurgaon prices are expected to appreciate in the vicinity of 20 per cent annually in all segments like residential, commercial, hospitalities, and shopping.

With hike in prices and to top it all home loan rates being escalated all the buyers and investors now no longer have the desire to pour their money in this sector which has led to stagnation.

The industry is on the move but will move in which direction and where will it head cannot be said. With some realism moving in, it has started becoming clear that those attractive real estate projects for which people have been longing will take considerable amount of time for completion and demand is expected to fall during this time. At the same time it is also being said that with the opening up of FDI there is around $15 to $17 billion waiting to be invested in the Indian real estate market which in turn means that the demand is not set to fall. Apart from this there are other predicament situations which are incessantly increasing the perplexity of and in the sector.

Another situation that is creating puzzlement is the floating home loan rates because of which buyers are hesitant and investors who put in their monies for profit are finding the equation tilting.

With this kind and amount of uncertainty and confusion and the sword of budget still hanging over our heads it is almost impossible to decide or even predict that what will happen in the real estate industry and where will it lead.

Hence, wait and watch is something that fits in the best.