Factors that are Still Negatively Impacting Indian Real Estate Sector
May 15, 2018 Real Estate News
Real estate is a sector which is highly preferred for investments and at the same time being hated as well. Owning a home is everyone’s dream in India and most of the urban dwellers do have their own flat but home buying in India is quite difficult. Although the government has introduced several legislative reforms to make the sector organise and transparent but still there are certain factors that impact the sector in a negative way.
Let’s understand what those are.
Price factor: Indian real estate sector is price sensitive as the fluctuation in the pricing depends on the demand and supply but not all the pockets. Such as, Mumbai is quite expensive investment destination wherein renting is preferred than owning a home. In other cities, suburbs are gaining momentum due to the price advantage. Hence the pricing factor needs to be rationalised but with the varied range of configurations and offerings, the price cannot be fixed. This remains one of the major negative areas that constantly affect the real estate sector. However, housing boards can come forward and initiate building an affordable home for various income segments.
Too many but fewer sales: the real estate sector has been experiencing slump for the past few years due to which the buyers’ sentiments especially the potential buyers were affected. Because of the untimely delivery of the projects, buyers were sitting on the fence to enter the market that resulted in a huge pile of unsold inventories. Also, saturation of land in most of the cities have resulted in the rise of property prices every year. Those who want to buy expect a better deal and negotiation. Therefore the entire demand and supply scenario have been affected and the market does not meet the market expectation of an average buyer.
Too much data to gather: buying a home is a one-time business. People almost spend their entire savings to buy a home. But before making the purchase decision there is too much to look into such as locality and property details, documents, various government policies like property tax, goods and services tax, maintenance costs of the property, any additional cost and so on. Also, home buyers wait for an ideal time wherein the property prices are low, banks offer attractive schemes, interest rates are low and builders offering lucrative deals. Hence there is too much data to gather. Although right now there are various portals which provides all kinds of information but those who are not aware of such sources, home buying is still a tedious and scattered task for them.
Illegal construction: buyers always look for properties with lower prices. This is where illegal construction come into play which usually small-time developers offer buyers with huge discounts in lieu of unapproved constructions. Issues like electricity connections, improper water, drainage and sewage system can affect the residents. Authorities do look into such matters but often it gets too late to unsettle the existing population. And at times there have been cases if building collapse. Several state governments are working on regularising properties but this issue is surely putting a negative impact on the real estate sector.
Let’s understand what those are.
Price factor: Indian real estate sector is price sensitive as the fluctuation in the pricing depends on the demand and supply but not all the pockets. Such as, Mumbai is quite expensive investment destination wherein renting is preferred than owning a home. In other cities, suburbs are gaining momentum due to the price advantage. Hence the pricing factor needs to be rationalised but with the varied range of configurations and offerings, the price cannot be fixed. This remains one of the major negative areas that constantly affect the real estate sector. However, housing boards can come forward and initiate building an affordable home for various income segments.
Too many but fewer sales: the real estate sector has been experiencing slump for the past few years due to which the buyers’ sentiments especially the potential buyers were affected. Because of the untimely delivery of the projects, buyers were sitting on the fence to enter the market that resulted in a huge pile of unsold inventories. Also, saturation of land in most of the cities have resulted in the rise of property prices every year. Those who want to buy expect a better deal and negotiation. Therefore the entire demand and supply scenario have been affected and the market does not meet the market expectation of an average buyer.
Too much data to gather: buying a home is a one-time business. People almost spend their entire savings to buy a home. But before making the purchase decision there is too much to look into such as locality and property details, documents, various government policies like property tax, goods and services tax, maintenance costs of the property, any additional cost and so on. Also, home buyers wait for an ideal time wherein the property prices are low, banks offer attractive schemes, interest rates are low and builders offering lucrative deals. Hence there is too much data to gather. Although right now there are various portals which provides all kinds of information but those who are not aware of such sources, home buying is still a tedious and scattered task for them.
Illegal construction: buyers always look for properties with lower prices. This is where illegal construction come into play which usually small-time developers offer buyers with huge discounts in lieu of unapproved constructions. Issues like electricity connections, improper water, drainage and sewage system can affect the residents. Authorities do look into such matters but often it gets too late to unsettle the existing population. And at times there have been cases if building collapse. Several state governments are working on regularising properties but this issue is surely putting a negative impact on the real estate sector.
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