Indian Metros: Real Estate Price crashed by 30 %


Not all asset classes have been on a bull run in anticipation of the election result on May 16, 2014 when votes will be counted.

Stocks may have been surging over the past few months but the secondary residential market has been going the other way, according to anecdotal evidence and the data thats available.

Prices of tens of thousands of homes built by local builders &  investors in the metros have crashed by as much as 20% to 30 % in the past one year, with their owners desperate to exit a market in which buyers seem to have completely disappeared. Brokers are left with a lot of free time.

Inside his tinted-glass offices in south Delhis Safdarjung Enclave, realtor Mr. Sunil Kapur holds up a list of 50 houses in the area that are for sale. Since,  there are no property buyers, hes been whiling away the time by surfing the Net or watching Mr. Narendra Modi and Mr. Rahul Gandhi on TV during the month-long election campaign. There is no point... there are no buyers.Those who come by are also not interested to buy at these prices, he said,as he winds up for lunch followed by an afternoon siesta,hoping that the situation will change dramatically after the election result is out.

Deepak Parekh, Chairman of Indias largest mortgage lender HDFC,'' The real estate market is certainly soft today. Secondary sales have slowed down and prices in that segment have come down."

The number of unsold homes is rising, said Anshuman Magazine, MD, Property consultant CBRE South Asia. The situation in the residential market is getting worse and piling inventory is mounting extra pressure on the investors holding capacity.This seems to be a good time to buy,but few buyers are convinced, he said.


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