Economics theory of demand and supply is not in accordance with the real estate market of India. It is not hidden that the actual demand of both commercial and residential real estate is currently quite low in India. Everyone knows that not even half of recently launched new projects have been sold in the major new cities in the country and as a result the inventories are getting piled up with the builders. In a survey report submitted by a property selling website there has been a drop of around 1 per cent in property index prices nationally. The major metropolitan cities like Bangalore, Mumbai and Hyderabad are experiencing bigger downfall.
It cannot be estimated that in future any correction in prices can be observed which can materialise the demand. It’s a difficult task to figure out the exact period of time till which this trend will stay. The research head of Knight Frank said that the main reason of high real estate price is market being governed by investors and not by consumers. The total absorption of investors comprise of 50-53 per cent. The investors, who rent out property, get full tax exemptions on the interest rate. On the other hand a first time buyer gets only 1, 50,000 exemptions on interest.
It cannot be estimated that in future any correction in prices can be observed which can materialise the demand. It’s a difficult task to figure out the exact period of time till which this trend will stay. The research head of Knight Frank said that the main reason of high real estate price is market being governed by investors and not by consumers. The total absorption of investors comprise of 50-53 per cent. The investors, who rent out property, get full tax exemptions on the interest rate. On the other hand a first time buyer gets only 1, 50,000 exemptions on interest.
Building Developers in India has created very favourable enviornments for foreign investers as well as domestic investors.The builders as well as consumers promises to set to usher the gold rush of realty.
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