Accommodation Times News Services
By Editor-in-Chief, Murari Chaturvedi,
Transparency in real estate deals is there in India which was not there before. It is observed from time to time that real estate prices are a function of liquidity in the system and the market sentiment. Presently the real estate market is at its lowest, it is time to analyse the reasons of it and finally finding solutions. The contracting story is of PE funds which invested about 2.4 billion in the real estate sector during the first nine months this year, surprisingly the full year investment of $2.1 billion in 2014 across 80 deals. Bengaluru has emerged as the top real estate investment destination followed by Pune and Chennai according to a report Mumbai, at first position five years earlier has slipped to eighth and Gurgaon from Seventh to Tenth according to the report. Presently the slowdown in property investment is due to delays in completion of projects, high property prices and over supply of housing in the market are the main factors. This slow down in property sales have discovered investors to invest any more in the property. Over 7,60,000 housing units are unsold in 14 cities in the country . Mumbai Metropolitan Region, NCR and Bengaluru together accounts for a little more than two-third of this. The reason for the dwelling sales of properties is the astronomical high rates of properties in metro cities. For example around 70 per cent people who want to purchase a flat in Mumbai can purchase a flat of around Rs. 50 lakhs to Rs. 60 lakhs, that too with housing finance but the flat in Mumbai’s far suburbs upto Borivali or Mulund is costing Rs. 1 crore and above. This is the bigger chunk of people, who need a small flat but can’t purchase it because of this limitation. Apart from this local condition of property market the global real estate investment fell in 2014 for the first time in five years, dropping 6.3 per cent to 4 1.21 billion. The situation is gloomy in real estate sector right now. So what should done to revive it. First of all rationalise the property prices all over and create good and really functional infrastructure around the property. Speculators in the grab of investors are spoiling the game and hence they should be discouraged to invest in property market.