Steep Increase in Property Prices Surrounded by Mega Project
May 19, 2017 Home Trading Steps
India is one of the most populated countries in the world and the number count does not seem to stop or slow down. So the increasing population has led to the tremendous rise in the need of property to accommodate such rising population. As property is almost a lifetime purchase people are not ready to have any compromise with it, so now the trend is to purchase property at places which are well equipped and well connected to different things like roadways, railways, metro, hospitals, schools, market etc. so the demand for such places which are surrounded by all these factors is high and supply remains to be completely inelastic. So due to this opposite effect prices seems to be constantly rising. There has been no fall in the price of property even though realty sector has been affected by weak sales and rising inventory. It’s in a position where people are expecting a lot of help and support from the government in realty sector in terms of infrastructural development and effective pricing policy.
To have a correct balance, the government now seems to have come up with new plans in the real estate market by making the investment into public sector generated from private land owners. The step has been taken by the government to fill the empty gaps in the public sector which will help to lead economic growth of our nation. Also as the government enters in this sector it will help to bring balance in the high rise property prices. The project is estimated to launch in February 2017 by our PM Narendra Modi. The entire initiative value capture financing (VCF) project is all set to be launched and worked upon from 2017-18.
Public financing has been used as a tool by all the developing and underdeveloped nations to kick forward the economy of that country. Same way the value capture financing (VCF) will be brought into existence be levying additional taxes and utilising such funds for financing infrastructure projects and other such sectors which will help to boost our economy. The process further goes through bifurcation depending on which area needs maximum development and how much value the project would fetch back in the years to come. Will it be a profitable proposition to invest so heavily in that area and also the nearby area as the investment is in huge numbers the decisions need to be made very carefully. So keeping all these things in mind, a detailed project report is prepared.
After sourcing out the best value capture financing (VCF) tool and once all the other calculations are done then there is a meeting between central and the state government where a memorandum of understanding (MOU) is signed between them. To take this process further a separate escrow account is opened where the fund is collected and shared in the ratio mentioned in the undersigned MOU.
Hence, after seeing all this developmental measurement by the government and the kind of infra projects coming up one thing is sure that along with the demand for such property the prices of property are also going to consistently rise.
To have a correct balance, the government now seems to have come up with new plans in the real estate market by making the investment into public sector generated from private land owners. The step has been taken by the government to fill the empty gaps in the public sector which will help to lead economic growth of our nation. Also as the government enters in this sector it will help to bring balance in the high rise property prices. The project is estimated to launch in February 2017 by our PM Narendra Modi. The entire initiative value capture financing (VCF) project is all set to be launched and worked upon from 2017-18.
Public financing has been used as a tool by all the developing and underdeveloped nations to kick forward the economy of that country. Same way the value capture financing (VCF) will be brought into existence be levying additional taxes and utilising such funds for financing infrastructure projects and other such sectors which will help to boost our economy. The process further goes through bifurcation depending on which area needs maximum development and how much value the project would fetch back in the years to come. Will it be a profitable proposition to invest so heavily in that area and also the nearby area as the investment is in huge numbers the decisions need to be made very carefully. So keeping all these things in mind, a detailed project report is prepared.
After sourcing out the best value capture financing (VCF) tool and once all the other calculations are done then there is a meeting between central and the state government where a memorandum of understanding (MOU) is signed between them. To take this process further a separate escrow account is opened where the fund is collected and shared in the ratio mentioned in the undersigned MOU.
Hence, after seeing all this developmental measurement by the government and the kind of infra projects coming up one thing is sure that along with the demand for such property the prices of property are also going to consistently rise.
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