Samar Srivastava
Retail, consumer goods and real estate are what keep me busy.

Why the real estate market could crack in 2013

For middle class Indians, investing in property has been the surest bang for the buck. On an average, property values have quadrupled in the last decade.

But now there are increasing signs that the dream run that real estate has enjoyed over the last decade could be coming to an end. Real estate practitioners point to slowing sales and rising inventories. As this story in The Economic Times explained, there is a glut of independent homes in south Delhi. Around the country, in separate micro-markets, the story is no different.

And so the question: could 2013 be the year when real estate begins to crack?

First, lets start by looking at the last period of low economic growth. Between 1995 and 2002, the Indian economy chugged along at an annual rate of 4.9 percent. Those who’ve been in the business long enough will tell you that real estate prices eased by 2-3 percent a year across large cities. “So by the end of 2002 you had a 20 percent decline but the year-on-year decline was very gradual,” according to a Mumbai-developer who declined to be named.

According to him three years of 5-6 percent growth and the situation could be repeated.

Second, the rise of the professional real estate investor. The last 10 years have seen a growing number of middle class Indians trying their hand at the property market. Their speculative behaviour is not unlike that of middle class Americans who during the go-go years bought houses only to flip them a couple of years later for a 15-20 percent gain. That came crashing down in early 2008 and the rest of the story is well known. It is only now that housing prices in America have started to rise.

India circa 2013 is no different. Dinner parties are filled with casual conversations on which apartment or piece of land to invest in. There’s this sweeping confidence in real estate giving a 20-25 percent return every year. According to Sanjay Dutt, chief executive at Cushman and Wakefield, if a developer sells 2,000 flats and 70 percent of those are to people who plan to put them on the market in a couple of years, those shouldn’t be counted as sales.

This leads to a situation in large metros where houses in under-construction projects are available anywhere between Rs 1,000-1,500 less than what the builder is selling them for. Those who want to sell houses are willing to take a small haircut. What happens when this becomes too acute is not too hard to see. The market would correct.

Lastly, according to the Ministry of Housing and Urban Poverty Alleviation, 11.09 million homes in urban areas are lying empty. Sellers are holding out in the hope that capital values continue to appreciate while buyers find the prices too steep. When that stock comes on stream this could also portend a correction.

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i have just purchased at tata housing Shubha Griha at ahemdabad and i think its a superb option for second home investment and greener homes.
Vikrant Maggu
Surenderji i agree to what you have said and being a developer can very well understand as to what the END Useher feels when he has to pay More from his pocket but sir you have to understand that when a builder has to purchase a plot and has to give cash as the land owner will not sell in full chque to save his tax and the same process goes on as the builder too needs to save tax because there are so many different type of taxes in our country and the price of land is so high that you need investors to pay you some money and in return the investor is benifitted by the price rise so the best way to solve this problem is reduce tax and stop Rs500/1000 notes this will end cash transaction at the same time government will get more taxes which will ultimately help solve this problem
Surender Jakhar
INVESTORS vs END USERS Pls. clear my confusion about the below points: 1. Why Investor required in Real Estate Market if ultimately he has to sell the same to END USER (Ultimately End User is the final financer). 2. Why Investment in Real Estate Market is not called Black Marketing (Because it Hits End users Lifestyle, because Due to Hike in prices of property end users have to pay virtually hiked prices & he is forced to live with a lower standard of lifestyle by compromising on his other day to day needs) & How this is different from Black Marketing in Railway Tickets,Fuel,Electricity & LPG. 3. How Investor Help Real Estate Market for lowering the Property Prices. Instead if Investors stop to enter in this market directly to buy a home or office & they should invest in the stock market for the respective builder, than their money can be used for construction before sales of the unit by builder to the end-users. 4. Direct Invesment are Good for our Country Economy or Bad for our Country Economy. 5. If Investors are Good for Country Economy & for Investor Profit than Why Government will not open Investment opportunity for General Public Directly in Railway Reservation, Fuel, Electricity & LPG. Investor can get good Return in these cases as compare to Real Estate. For Example: Like in Real Estate any one who have enough money is free to buy n numbers of property by paying tax to govt & become a legal deal. In the same manner If Govt. opens Railway Tickets Reservation system can be open for General Public who actually don't travel ( Than Called Investor) & he can buy ticket in advance (pay tax to the gov.) become legal purchase & than later on can sell the ticket to actual traveller ( So called END User), the end user have to buy ticket for higher price from this Investor for the same standard of travelling which he could get if railway directly sell the ticket to him. Pls. differentiate How those two situation are different as per economics rule of demand & supply. 6. Why Property Price Hike is considered as Growth (While Price Hike of Railway Tickets,Fuel,Electricity & LPG Considered as Inflation) & Similarly Property Price Stability is considered as Slow down of market & General public is not happy with this situation. (While low prices of Railway Tickets,Fuel,Electricity & LPG Considered as Good Situation & Good ) 7. If Investor have enough money than why they don't prefer Fixed Deposit in Bank, If Bank get sufficient money from the Investor than Bank Can create competition between Investors pay them less FD Interest rate & offer Loan to required ( Industry & Builders & End users) with very Low Interest Percentage & Money can be used in various of projects other than Real Estate also . Even If Investor are not directly Invest in the Real Estate than the Price of Land will also become low as compare to now. Than an Industry setup Can get the Land for Manufacturing/ operations with Lower Price & Can use Investor Money thru Bank with Lower Interest , Hence Can Produce Products with Lower Cost due to low Input Cost. 8. Property Price Hike is Healthy for Our Country Economy or not, in both cases pls. explain how?? 9. Why Property Growth is measured in terms of per unit Price Hike but not in terms of Infrastructure ( unit) Volume Hike. 10. If Infrastructure/ Construction Volume is taken into Account for measuring Real Estate Growth than the Price Must not increase steeply, I am i right or wrong ?? 11. How Government Can Stop Investor to Invest their Money Directly in Real Estate & Encourage Investor for Share Market & Bank FD (So that Day to Day Life of End-Users Won,t Effect because Investor are not Directly involve in property buying hence keep the Property Prices Genuine.) 12. Why General Peoples (End Users) along with opposition Political party are not raising the issue against ruling party for Price hike in Real Estate ?? as they are raising in other cases for price hike in Sugar, Railway, Fuel etc. 13. In the renter system, Investor are not there, so you may see the Rent vs Property whole price is just 0.1% per month, for example a property worth Rs. 1 Crore the rent is only rs. 10 K, which is less than Bank FD because if someone put Rs. 1 Crore in Bank FD than he will get 0.75% /month Interest (09% Annually) (around Rs. 75000/month) whoever he is getting only rs. 10-15K as a rent. . The Rent actually indicated the really shows per ca-pita income because rent is only paid by a person who actually utilize the space. We are Generally compare our country with Developed country in terms of Infrastructure, but the above situation Indicated that if Infrastructure is our least preference because if improves than Property price will not hike steeply, Pls. correct me point wise, I will be wrong at many points because of lack of knowledge.
Very well said Mr Surender Jakhar.
The real growth counted is appreciation less inflation. real estate is the only place that counts the inflation. FDs and all other financial instruments show fake gain, hence the inclination towards Property. Here also Govt. takes the fleece off the middle class investor by charging heavy registration charges. So you end up with dealing in the Black market, thanks to the Govt. policies.
Aditya Khurana
The present situation discussed is very much true. I think one of the major question is that where To invest in Fixed Deposit for consistent Profits? Maximum interest rate per annum could be received than what it is usually promised to you. Taking care of your numerous requirements in an effective manner will let you come across the best deals offering you increased benefits. Investing into the real estate maket will let you organize your preferences in such a way that more benefits are obtained in the long run.Least monitoring is required as the property prices never fluctuate as much as that of the stock market prices.
Anindita Mukherji
Now that we are already in 2014, it is really interesting to see how the market actually behaved in 2013. Developers were under a lot of pressure because of slowness in the domestic economy, and many domestic buyers continued to wait on sidelines hoping for a significant correction in the market. As a result, developers, especially those in Mumbai were were sitting on huge inventory, and some price correction could have actually happened only if one factor had not emerged. What was this factor? The factor was depreciation in Indian rupee (INR). The 25-35% fall in exchange rate in 2013, acted as a discount for NRIs, and many of them jumped on the opportunity to invest in real estate in India. NRIs from across the world invested more than US$ 2 billion or INR 12,000 crores in the Indian real estate market in 2013. The investments, saw a 35% jump compared to the previous year. Developers were also quick to recognize this change, and many of them organized and participated in international exhibitions and roadshows in countries with large NRI population. Investments by NRIs was so dominant that in some projects they accounted for 50% of total sales. At an overall level, 12 percent of total apartment sale in top seven cities were made to NRIs. Thus to some extent NRIs came to rescue of developers, and prevented the market from crashing. Now again, with developers supporting election campaign expenditure of major political parties, many of them are under acute liquidity crunch, and may again be pushed to cut prices to attract domestic buyers, especially if NRI interest diminishes in 2014.
Now a days middle class people's one and only dream is buy own house. Where ever go in india(Meto cities) prices are not available to middle class people. The dreams remains the dream isproperty prices are bound to be on higher side due to limited area & population increase but right now there has to be a correction in prices for the time being because this buoyancy has been there since 2005 so now at this juncture correction is inevitable. Praveen
I dont know much about Bangalore or Delhi but since I operate in Mumbai I thought sharing something about this. Like many other comments i too agree that Real estate price correction in Mumbai is a myth. What is happening now is area correction. Now you get a 2BHk at 800 sqft super builtup area and the layouts are pretty compact. The common toilet would have the washbasin opened to living area. But I must mention that commercial outright prices have corrected with time. If we take Lower Parel say, spaces were selling at 25000-30000 in 2010-2011. Now below 17000 you can own premium commercial space. Even in BKC rates are now not aggressive as they were. So what happened to residential? The only difference between the two products is that commercial properties compete with the properties existing at present. And residential properties compete with spaces to be created in future. For a buyer it is not clear to him what quantum of inventory will come up in future at that locality. But 3-5 years down the line when more and more properties will be given possession there will be many investors in the market trying to exit their property. Most of the properties launched in the launching spree of 2010 have not been given possession. Town ship projects which are getting approvals in phases will take not less than 10 years to get fully handing over. So the only factor that can hold the rates is poor economic condition like we faced in later half of 2013. Tips for investing in Real Estate: 1. Invest at negotiated rates in bad times when there are few buyers. 2. Take point of view of local brokers. Developers now a days are investing more on brokers than on direct ads to minimize their marketing expenses. In under construction properties brokers do not charge buyers usually. 3. Plan first when to exit the property and analyze the rates now and then. Be careful about transfer fees and exit clauses. 4. Analyze the future volume of inventory that can be your comepetition when you try to exit. More competition means less return on investment. 5. 20:80 schemes might look attractive but they bind you usually by not letting you exit before possession. Moreover they are overpriced because the developer loads the subvention charges on base price. Follow my blog
Following are the Two major facts leading the growth of Real Estate in Bangalore city 1) The massive migration of educated and uneducated youths in search of jobs leads to real estate demand 2) The population burst in the city with huge migrated youth settling in Bangalore city once into job, increases demand in real estate
For a city like Bangalore, where the major investors in real estate have been historically from Information technology background, I doubt the the real estate may be collapsing in near future. The reason is that the IT industry has almost come to saturation and salaries of the new generation investors (read it college pass-outs) are very less compared to what it used to be years back (ofcourse considering inflation). I understand that considering the higher inflation rate the purchasing power of new generation would be significantly lesser that what it used to be. I buy a property for amount A; after some years I plan to sell it for 3xA (which is lets say completely reasonable on paper; pseudo price????) but unfortunately I would not get a single buyer because my potential buyers (new gen buyers) for whom buying a house is necessity not an investment would be falling sort on budget (against the pseudo price) and for the generation earlier than me who have secured fortune, it wont be a necessity but an investment and its me who have to compromise on prices and I would end up selling the property below the market rate (read it pseudo price). I would prefer to stay away from Bangalore real estate and invest in some more stable market like Delhi, mumbai... etc where I can get buyers from different segments of society. I am not an expert; I would love to hear any constructive comments from readers.
Places like Mumbai borivali, property prices of 1 BHK of building aged 18 year and more is costing you base pri lbase prices If you include stamp duty VAT it wikl cost you cr. Jus for a moment that property aged18 to 30 ywras by that EMI of 50k for 20 years property become 38 to 40 years aged and you become nearly 50 or more and will be ownerwe of 1 bhk flat consideringha5-50 lacd in hanYou will be the proud owner of 550-600 sq ft flat which is having 400-450 usable arear. I think none of you will like considering all your other family responsibility. Guys one alone can not raise the voice united we are strong. Just we have seen impact in deli election so please join the hands boycutt the market for certain.period. disclose the brokers who are inflating prices, take support from IT authorities to disclose black money and disclusr se dirty builders and their projects
Delhi and gurgaon are surely witnessing correction all due to stringent policies and things are looking not that good regards Rajni
Hi, I am into real estate sector since 2007 ( We deal in all kinds of real estate transactions keeping it low but I have seen fluctuations in the market. One has to really understand that this sector is filled with people who are originally either politicians, high rank govt. officers or the mafias. They manipulate the market and thats what they have been doing since last 9 months. They spread news what they want to and since people here are more drawn to what they hear rather than going into the depth. Real estate downfall, high prices, more vacant flats/apartments are because of the too competitive elections this time. Once the elections are over everything would seem as normal because in reality everything is same. Its called viral marketing thats what the investors do when they like to manipulate the buyers so that it doesnt cause them loss if by chance not profit. Moreover, Projections are just synonyms to if, but and may be. So, do not just flow with what you hear or read. Kindly read, research govt. blogs related to real estate and then decide whether and where you want to invest. Best Regards, Kabir.
What I undestand is following. Its all multiple trading (buying and selling) for a same property that makes the property costlier. I have seen in Gurgaon that one flat is sold at least 5 times made it costlier by 80% roughly. The intrinsic value of the flat is less (property depreciates) but the effective price is more, what a shitty combination! I heard in many parts of the world, old properties are sold cheaper but in India its amazing to see that people pay same for old or new property - looks like people dont know anything about depreciation concept. Many a times, we say sentiments makes the market rates but time is about to come when market rates will makes the sentiments and correction has to come. Nothing goes in one direction all the time.
Do you understand inflation ?. Do you know what India's average annual inflation has been over last 10 years ?. Do you realize that depreciation rate on apartments will be in basis points vs. percentage points ?
robin gurjar khari
I dont agree with mr sri srivastav indias populatiom.will tend to rise not in big boost but a more than a bit & all those inventories which are left unsold will be in a purchase mode soon &indias literacy rate is increasing day by day So also a worrry of about indias population will not be there will not be there as far as m concerned BAGHPAT will see a new infrastructure boost in upcoming Five to eight years jai bhole nath om!
LOLzz & Only LOLzzz + ROFLzzzz :D People in India are way less aware than in developed (or even many of developing) countries. Guys like you are still keeping the sale up in real estate. Just on the hope that what had came in till now is going to continue. Dear Mr. khari/gurjar Please note that although literacy inceased & population grew, the income of individual is not growing whereas artificial price rise is a common story. Therefore purchasing power is bound to decline. This will cause prices to fall down. Real estate had been still holding on because people like you, put in your hard earned money into that brick cube, not realizing that once the prices go beyond the reach of average purchaser (which is the case now) sale will drop & thereby bringing down the cycle. THIS IS HOW IT WORKS :- Real estate prices will continue to hold & might even appreciate for some more time, because the builder lobby & banks wants to get there investment returns. Banks will definitely not tread the US reality path. Average Indian will fall for this mirage & will put in their life's earnings. But as soon as builders reap the fruit of their investments, price will topple down. Builders will cherish, Banks will sigh of relief. & the aam admi will again cry. Jai Bhole blah blah blah .....
Shubhankar Durva
Investment in apartment or piece of land is really beneficial.It make people rich.
I feel to buy real estate in Mumbai,person should earn at least Rs.1.5 lacs per month or a husband wife income of Rs.1.5 lacs.You can then buy a 2bhk flat worth 75 lacs all inclusive beyong borivali and Thane.For people who earn below that they will have to move out of Mumbai or buy smaller flats.I dont see any scope for prices comming down as cement,steel and other construction material cost keep increasing every month and so do goverment taxes.Goverment has to play a major role in housing if something has to happen.
Real estate industry is seemingly changing with a new pace ad realtors are really defaulting. One has to look forward the location, price ad their budget for buying a property. The Real Estate market will undoubtedly rise up only. It is advisable to take some guidance from a expert Realtor who would help selecting the est property!
These kind of cycles will keep on rolling. If you're a bit long & non leveraged, go for Land in Delhi under the Delhi Master Plan. At current valuations there is no downside & a bit of research will surprise you with the returns. Speaking from experience..
Property prices are bound to be on higher side due to limited area & population increase but right now there has to be a correction in prices for the time being because this buoyancy has been there since 2005 so now at this juncture correction is inevitable.The property owned by politico & bureaucrats accounts for nearly 30% of the total area.The remaining 20% is owned by industrialist & 15% is by industries so availability itself is limited & on the other hand population is growing rapidly.One crash in near future is inevitable.
In any economy,prices are dependent on market force & market force is dependent on sentiments of people.Just a simple example of this is,in the year 2005 people were not ready to buy flat @Rs.2000\-sq.ft. in 2007 people were mad after the same property for Rs.8000\-sq.ft now the question arises is how come all of a sudden in two years one's purchasing power increased by four folds?Each & every buyer became member of D company or they all have become power brokers?It's all sentiments plus corruption money used to purchase the property.Real estate market is the heaven to burry the entire corruption money & one can hide even Rs.5000 Crore in a single peice of paper.
Whenever there is Congress in power prices of real estate goes high. in 1991-1995 Congress in power prices went up. in 1996-2004 BJP in power check the price hike its hardly 10 to 30%. and from 2004 onwards ????? high reality price gift from Congress.
Very limited analysis. Vinay Upponi in an article on was I guess the first person to have written that prices in real estate will crash about six months back. While there is a lot of talk about price correction, developers seem to be living in their own dream world ( especially in Mumbai). The price quoted is so ridiculous high, that I really wonder how many takers do they find at such prices.
The real estate market has gone so tight that Indian Realtors have started defaulting. Also India sitting on more than 700 million sq.ft of unsold inventory almost 3 years of consumption. With 80-20 rule out of the way there is no option except to cut prices and the signs of price cuts are clearly visible as explained in this article:
Hey guys, just got an info that the govt is proposing additional 5% additional capital gains if the property is sold in less than 5 years after getting possession. The Proposal is from the housing ministry and being discussed with MOF (Ministry of finance) who wants money for controlling the CAD. If the proposal gets through, Prices will crash like anything............
We are going through a phase where everyone is wondering about the future. However, if we study the past of real estate in India, we would realize that it is a temporary phase.
It is very true what you are saying. I have come across a very interesting piece of report on 'The collapse of Indian Real Estate'. It says that the favorable demographics, acute shortage of housing, easy credit condition and high velocity of illicit money in the economy over the last few years has made Real Estate as one of the most preferred investment in India. Today, Indian Real Estate is one of the most expensive pieces of land in comparison to cross country per capita income. You can find the entire report on
Thanks for the report.
Wish to know what could be the trend for the next 2 to 3 years of real estate market in chennai
Our unique combination of low property tax,unaccounted money,poor financial imagination,low costs of transaction is leading to the strange combination of high apartment prices and unoccupied flats.Am not complaining though,as i live in a 1100sq feet suburban apartment for a rent of 6000inr. Here is one welcome side effect of the high real estate prices in that it has accelerated the suburbanisation of india. Personally,i beleive prices as well as the stock market and the rupee is overvalued by 20-22% and the correction is occuring in varioue forms...inflation,rupee devaluing,real estate VFM proposals.
I totally second this. Being in the field I have already noticed the decline in sales. Most of the small time investors and the cunning real estate brokers are the reason for the inappropriate rise in the property value. there should be some minimum qualification or certificate to serve as brokers which will help to monitor them. The rise in number of builders and flat promoters is also a big headache, when considering the situation in chennai, all the ghost cities being built in the sub urban of chennai is the most troubling aspect.
Hi, I am a budding real estate broker and wanna be sure if this slowdown will continue or will recover after a year or so... as i am looking forward to it as a full time career in broking.I completely read your information its true and i accept this.Thanks for sharing this information.
Retail Shop in Gurgaon. Gurgaon is two cities living within a bigger ecosystem - Old Gurgaon and New Gurgaon. While old Gurgaon has poor infrastructure and is very congested, new Gurgaon is a complete contrast with skyscrapers and well planned development. Gurgaon has the third highest per capita income in India after Chandigarh and Mumbai. Gurgaon is also the only Indian city to have successfully distributed electricity connections to all its households. Over the past 25 years the city has undergone rapid development and construction. According to the 2011 census, Gurgaon’s population rose to 15.14 lakh from 8.70 lakh in 2001. This suggests that there has been a 73.93% population growth in the district.
Planning to invest in Mumbai real estate. Do you think i should wait or now is the correct time? going to invest in affordable housing and not luxury.
I personally think one of the main reason of inflation in india is due to over prices of real estate. peoples have to shell out more money for paying rent or buying property for residential or commercial purpose. So this persons ask for more salaries or commissions etc... thus increments in inflation goes on and on... this should be stopped some where or we will be in big trouble.
Vikram S Gupta
I am from a real estate sector. In india Housing requirement far outstrip the supply. Yes I feel that the Prices in Real Estate looks on higer side. Please dont expect builder to sell at cheaper rates but obviously they have to deliver value for money. I expect some big innovation (Government Policy) or major change in land purchase policy to change the game. Am expecting major changes / innovation in real estate sector in next 1 to 2 year. Obviously those company who innovate with time will survive rest will perish.
padamvir singh chauhan
due to overprice of property value nd out of reach to average people , further financial insitutes as well as govt. of india not favouring to flow money that is why it seems to be down trend
gulshan bhutani
coming 18 to 24 months are crucial for indian real estate market due cash crunch
rajeev khandare
The flat prices must be less because 60% parts of flat are in common like wall, floor slab, stair case, passage ,& ground/plot ,water supply,lift etc. but builders & promoters are cheating to common man & government also not interesting in it , flat prices are rised due to only investors extra money they have. but saturation stage will come then flat prices will remain steady / constant for some year & then flat prices will show like graph of invert U ,forever/always after 25 years all construction material would be out of date & building/constructed flat home also declining its strength & maintenance cost increasing & looking old fashioned
Vishva Punjabi
In my view if an investor wishes to invest in real estate in india they should invest in small cities where the prices are not so high and there are good chances of increasing price and making good profit for a small investment. The metro cities are already so much overpriced that, to invest in metro cities we should wait for the prices to go down as mention in this article.
I strongly feel, Delhi-NCR(Except Gaziabad and faridabad) will see steepest fall in the prices of real estate totune of 30-40% of current prices. Talk about RBI latest Crr policy, increasing loan rates and people not willing to sell speculated property in less, may initiate India Sub Prime Crisis very soon! Its only my personal opinion.
How is the future of real estate market in Nagpur,Maharashtra?
Will real Estate market correct due to the proposed regulator coming in force? Is it right time to buy a house (For a banker like me belonging to middle class) ? Or Should I wait? If yes, how long?
The real estate prices will see a pressure and fall in luxury segment from Rs 9,000 per sq ft onwards. The affordable segment of Rs 2900 to Rs 5900 would hardly see a dip; as they are already marginally priced in this current market. Infact, the affordable segment will increase range bound once the festivals starts AND will increase permanently after the election is over. The real estate bill will only increase the price of the affordable segment as the builder need to wait for all clearances to launch the project and the financing would be also in a tight compartment. Actual users cannot afford to postpone the decision. BUY NOW or Regret later. Of course go with a good builders who deliver good quality product. Mr Anand Sharma, Are you from Navi Mumbai? This hi-tech city will become unaffordable after 5 years now onwards.
That is the the situation it seems like.. the middle class people who were small time investors inflated the market and can no more be called middle class.. the actual middle class has to face the music who cudnt make use of the opportunity and are left with no choice but to pay much more than they could have imagined for the roof of their next generation to come but i guess it would be too early to say that... but on the other hand the market has shown an abnormal behavior in the past decade according to the article. it might be because of the reason that the sector wasnt organised properly.. government is developing policies to control the market now. small cities are getting organised and gettng to utilise and manuplate technology.. there has all ways been an opportunity in the real estate field u just know where to look for it.As far as numbers are conserned we could only presume.
real estate is a sector where investment have no risk. prices of property always increase.
So what will happend in the end of the year 2013 for gujarat?will be price of houses decrease or not?
Affordable segment will be stable and may see margin correction. Premium/Luxury segment will see pressure and will dip.
Property in Hyderabad
Due to the decrease in the demand of property from last 10-12 months make this crack in the real estate and to take cover from this crack down developers and builders gives discount and land perks on their residential as well as commercial property. For more please read this article
Yes! I feel their may be small correction in the pricing. How ever in Chennai this may not be felt much because it is an end user market and it was a safe market for most of the builders
This is a true sector from where people (Buyer, Seller ,investors) perhaps get huge amount of lucrative return from there investment. Notwithstanding the middle class Indian are looking to take home for end using purpose. if the investors are noting coming repeatedly the booming industry(in lat decade) shall go down.National govt should take initiative for development.
Truely support this brave analysis. Althogh for the ppl the truth is bitter.
yes definatly it will go down as in current situation already middalclass lost its purchasing desire or you can say capacity... very soon you people will see the real estate crake down......
why not government interfere in housing business. after all roti,kapda and makan are necessary things and this should not allowed for huge profit making business... again 12 millions homes are empty( no use) again loss to national economy . every steps should be taken to keep away black money and investors .
An ugly play of Money and Greed,while on one hand there are 12 million flats(official number/ha ha) lying empty and only spiders make there living out of it, there are whole bunch of salaried middle class of more than 120 million people who live only in dreams of owning 500 sq/ft flat in city/or die under the burden of life long debt of housing loans,without enjoying anything worth in life. I am not against of real estate business but at-least fundamental human needs should not be traded just for gain of few
very rightly said by Giridhar....we need to make a balance...real estate is not only a business but also NEED so it should not be based on GREED long term everything survives if it is based on moral is every ones responsibility whoever is associated with this business/industry directly or indirectly
Dear Giri... Wisely said, We are living in India, a place where even 1 billion US $ can be invested in real estates through proxy and no question will be asked. If there are less than 50000 people in India who earn more than a crore as salary, to whom are the apartments worth crores are sold ? Just curious. With Unregulated market and corrupt people (including politicians and people), India is nothing less than a third grade african country.
In the short run, the market will shows cracks in certain micro markets, especially in new developing towns such as Greater Noida. However, in the long run the investment in real estate in India will still generate good returns.
Namrata Mahadik
The real estate broking market in India is obsessed by increase in the command for housing and business space in India. Grow in non-refundable returns and trend of real estate sector to endure market instability has led to an overall increase in investments in the sector. Resource Research on India :
Buying a property by middle class person is now a days became tough due to very high prices in real estate.But the property rates are high for buyers and low for sellers which shows the unpredictable market strategy.
PRICES of property are artificial high if you want to sell property rates are app.30% lower where as if you want to buy same propertyrate are much higer due this also buyers are less ,other reasosis in NCR rates of property will come down due to lack electricity,water supply ,muilty storied buildings are not conferm to earth quick , prices of gold are down ,
Williams Anderson
Nowadays the main reason for high pricing of property is the black money. The middle class person can’t think about the purchasing of property. In this case the real estate inspector will help you.
A very good report Sir. I like it and got a little scared as well as i am a budding real estate broker and wanna be sure if this slowdown will continue or will recover after a year or so... as i am looking forward to it as a full time career in broking. And if the market is gonna be like this then i might rethink or go on... Your reply will be appreciated.Looking forward to know more about it. Thanks. With best wishes.
The real estate is an evergreen industry for investment in longer terms. There might be a slowdown due to some economic activities but it will not be a loosing deal in longer run.
very good analysis to keep your lively hood alive. but is it honest.
i agree this is not honest opinion .... might be this guy invet in real estate so he react like this .. but in real situation its not possibal to gain high profit booking.. nera by election , new government, and present economic situation there must ne big correction in it will impact for longer term
My position is that real estate industry has unlocked the value of land in India. This unlocking wave is spreading into the interiors. Speculators/ investors are building the infrastructure of India. They are building the new cities. Not entirely in Govt. this is a good thing. So as long as investors are in 'value unlocking' phase, real estate will not fall. As the individual micro market matures, the investor will shift to the next. Thereby maintaining return on his portfolio. This country is getting built. So real estate portfolios will see very good return for the next few decades. But Create happiness in life by enjoying simple things in this complicated world. But individual micro markets will grow, and stabilize. Thats all is to it. As far as livability is concerned, mature micro markets will have very high resistance levels on the downward due saturation,low vacancy and high desirability in the end user. So if someone has missed the bus in mumbai on his capacity to buy, well, tough luck, prices will not crash repeat not crash. But if someone wants to have a real estte portfolio, then, mumbai is a ign beta stock and he needs to have a diversified portfolio. Simple thumb rule. If the rate of return on the property is falling and then get out and invest 5 km outwards...keep repeating untl you wanna cash out. ..Joy
How long do you think that this chain can continue ? 2 or 3 decades is too lengthy to see a crash. I can see that during the last 3 years, people have been speaking about real estate market crash, but nothing much has really happened. Power of black money ?
There are serious investors who are sitting on their own money unlike some who are borrowing; hence the market will eventually sustain as this is in everyone's interest. Mrs Singh
At my recent visit to India, I encountered a strange fact. The fact that Black Money investment is so many fold the white money that any downfall in the real estate market will be buffered by the black money. Investors (with BM) may suffer but it will not reflect on the economy. Again, just a high level comment without going into the details. I am assuming there is some truth to it.
Dear Samar. Thanks for this analysis, though academically there are all reasons for the last several years that property prices should have cooled down. I have highlighted some reasons why prices will not go down. Could you please comment on each of these : Reasons why prices will never go down or even Stagnate a) Safest Haven to Politicians Black money- With now so much of focus on Swiss bank accounts politicians are finding that putting there money in Raw Real Estate is great. i.e barren farm lands that later is picked by a Real Estate developer company b) Easy way to Evade Capital Gains- This is one of the biggest reasons why Middle class believes in it c) Investor-Builder-Dealer Nexus- If you see Gurgaon, prices in upcoming locations have gone up by almost 3 times ? why is that. The reason is purely that Investors, Builder & Brokers are working hand-in-glove. There is no way this can be broker by individual consumers d) Population explosion in Middle & Upper Class- Given that the demand is perennial due to growing Incomes, the prices would always go up
Vasantham Promoters
I completely read your information its true and i accept this.Thanks for sharing this information.

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Maneesh Kumar
A very shallow analysis, this article is based on one piece of historical trend and the assumption that the trend will repeat in 2013. Grow some grey cells Mr. Samir
Samar Srivastava
Thank you for your insightful and well reasoned comment Mr. Maneesh.
You have all the right to disagree with the views of the auther. But your anger shows that your disagreement is due to the uncomfortable feelings created by the article rather than any intellectual reasoning. Just do a self check to ensure that you are not carried away by emotions.
indian property market has become unaffordable for the middle class and the lower middle will remain so ,as there is a political builder mafia terrorist nexus,which can not be broken .may be sometime in future a leader will arise who will work for the long forgotten roti,kapda aur makkan of the sweating malnourihed scum people of this land of great slums.
If you see pockets like Gurgaon, it is the professional investor all over the place. It is also a good reason, no one is excited about entrepreneurship. About the market cracking, I have my doubts. It could stagnate over a considerable period. And if you have a forgiving central bank (remember 2008), who knows prices will keep rising. Can you please share the link to the 11.09 million number.? Best Regards, Raj
Samar Srivastava
Hi Raj Here's the link to the 11.09 million number.
Samar, thanks. Will dig up the report as well. I am quite puzzled by what I see.
Homes are made only for NRI and Black money holder and not for common man... around 35% of the house are vacant and there is vacant property tax... Rent and buy both are difficult... India going through Super high Inflation in very term...
Samar sir, There is a myth in India's household that buy property anywhere, it will be ever in loss in long term.. thanks to Black Money... and you know people buying and selling below ready reckoner rate, they just pay full stamp duty... so me and my husband who is working day and night still struggling to buy 2 BHK even we thought to take 35L loan because we do not have Black Money. Also loading has gone above 50%, so buying home is always loss.. govt always show carrot of real estate regulator but never work on it as they have their own benefit... even Ministers have lots of flats in Singapore n Dubai and their son enjoying there... Can u write honestly abt it?
Black Money will take the prices of property to the next level. But for a middle class it is now becoming almost unaffordable to buy a property in metros and Tier-1 cities...The demand for these property will subsidize soon and the property rates will be stagnant. Only then the black money will be out of the real estate market.. Prices in Mumbai are not increasing the way it used to be in the last 5 years.
Pray tell why are you struggling to buy a house. Why not just be happy in renting an apartment?? Makes so much more sense financially. Why is everybody in India so obsessed with owning their own homes??
Swati, if you r from Mumbai, then you can get your dream home in adjacent hi-tech city Navi Mumbai. Quite a few good numbers of builders are offering flats from Rs 20 lacs onwards with gated communities. Builders like Lodha developers, India bulls, Hiranandani, Arihant Superstructures and Tata Housing area having affordable luxury projects. All the best.
Vaibhav Mathur
Almost every 6 months there is an article like this which us again speculative as there is no hard evidence to support the claim. Although the fact is that most houses bought in a new project are by investors who would put it up for sale later the fact also is that the return is not required by these investor. In that case they are willing to hold. I believe that this is one treason that tents have not increased as much as capital appreciation of the property. Investors are happy to take in whatever comes in the form of rent and are focused on the more lucrative return. If prices have to go down rents should rise, this looks convulsive but this is exactly what is happening in South Delhi where the prices have been more or less stagnant but rents have increased. In that case there will be a threshold above which rents cannot rise and a corresponding limit for sale price. The question that needs to e answered is what is this limit and when do we reach it.
Samar Srivastava
After studying law I vectored towards journalism by accident and its the only job I've done since.
It's a job that has taken me on a private jet to Jaisalmer - where I wrote India's first feature on fractional ownership of business jets - to the badlands of west UP where India's sugar economy is inextricably new tied to politics.
I'm a big fan of new business models and crafty entrepreneurs. Fortunately for me there are plenty of those in Asia at the moment.
Bouquets and brickbats are welcome at
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April 06, 2015 17:31 pm by Technical Features and Functionalities of a Concrete Real Estate Website | Technologie Physique
[...] A reputed real estate website maintains all the functionalities perfectly. Web designers will select the correct pictures for those websites. The website pictures will be real estate related. Simple and black-white color combination designs are applicable for that business website. Selection o...
April 06, 2015 11:34 am by Technical Features and Functionalities of a Concrete Real Estate Website
[...] A reputed real estate website maintains all the functionalities perfectly. Web designers will select the correct pictures for those websites. The website pictures will be real estate related. Simple and black-white color combination designs are applicable for that business website. Selection o...
August 21, 2014 19:47 pm by Rakesh
The real growth counted is appreciation less inflation. real estate is the only place that counts the inflation. FDs and all other financial instruments show fake gain, hence the inclination towards Property. Here also Govt. takes the fleece off the middle class investor by charging heavy registrati...
July 30, 2014 19:19 pm by kevan
i have just purchased at tata housing Shubha Griha at ahemdabad and i think its a superb option for second home investment and greener homes.
July 18, 2014 11:19 am by Pankaj Gupta
Very well said Mr Surender Jakhar.