In Delhi and Mumbai, buying interest in real estate market is seen going down and new dealings are less. In a survey brokers say there is decline in deals done by them.
In metros, money from politicians, builders and under world pushed the prices of property to new highs, and the hike was not natural. A positive effect in the market was due to ever increasing Sensex. Those who earned from share market invested in real estate. Now the Sensex has slipped from 21,000 to around 13,000. Interest rate on home loan has also increased. In such a scenario, the real estate market has to fall.
In sub-prime crisis in USA, Indian IT companies are in problem, because they were getting BPO business from multinational companies in USA. To cut the expenses, IT companies may reduce their staff or stop increment in salary. The company will not need any more property for their office. This is the reason, prices in properties are declining faster at Bangalore and Hyderabad, IT hubs of India.
In Mumbai, figures from registration office, indicates that new deals in properties is less by 12000 during the year. This decline is about 20 %.
In Mumbai, 1992-1996 was a bullish period for estates and then in 1996, bearish phase triggered which extended upto 2003. And again 2003-2007 was bullish. The pattern of increase in price was similar during both the bullish period. For the latest bullish period, besides share market, decrease in rate of interest was also the prime reason. Rate of interest from 16 % in 1996, decreases to 7 % in 1993. Low interest rate prompted employees with good salary to buy a home on loan instead of staying in a rented house. Now interest rate on home loan has gone to 12 %, that forced the employees to sell the flat and go for rented house again.
In 1995, when share market got down, there was 30-40 % decline in estates all over India, and that too is feared again now when share market is not in a good position.
But yet, big builders who are capable of holding, do not sell properties at lower price, but offer discounts to the purchasers. Swastik Builder of Thane offered a car against sell of a flat. Even that was not enough to attract buyers, the builder arranged with a co-operative bank which passed loan at 8 % for the purchaser.
The rents are reduced by the owner of flats and this is an indication of the bearish phase in real estate. And if this happens it will continues at least for more 7 years as the last period.
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In metros, money from politicians, builders and under world pushed the prices of property to new highs, and the hike was not natural. A positive effect in the market was due to ever increasing Sensex. Those who earned from share market invested in real estate. Now the Sensex has slipped from 21,000 to around 13,000. Interest rate on home loan has also increased. In such a scenario, the real estate market has to fall.
In sub-prime crisis in USA, Indian IT companies are in problem, because they were getting BPO business from multinational companies in USA. To cut the expenses, IT companies may reduce their staff or stop increment in salary. The company will not need any more property for their office. This is the reason, prices in properties are declining faster at Bangalore and Hyderabad, IT hubs of India.
In Mumbai, figures from registration office, indicates that new deals in properties is less by 12000 during the year. This decline is about 20 %.
In Mumbai, 1992-1996 was a bullish period for estates and then in 1996, bearish phase triggered which extended upto 2003. And again 2003-2007 was bullish. The pattern of increase in price was similar during both the bullish period. For the latest bullish period, besides share market, decrease in rate of interest was also the prime reason. Rate of interest from 16 % in 1996, decreases to 7 % in 1993. Low interest rate prompted employees with good salary to buy a home on loan instead of staying in a rented house. Now interest rate on home loan has gone to 12 %, that forced the employees to sell the flat and go for rented house again.
In 1995, when share market got down, there was 30-40 % decline in estates all over India, and that too is feared again now when share market is not in a good position.
But yet, big builders who are capable of holding, do not sell properties at lower price, but offer discounts to the purchasers. Swastik Builder of Thane offered a car against sell of a flat. Even that was not enough to attract buyers, the builder arranged with a co-operative bank which passed loan at 8 % for the purchaser.
The rents are reduced by the owner of flats and this is an indication of the bearish phase in real estate. And if this happens it will continues at least for more 7 years as the last period.
Read Other Articles :
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