[INDIA REAL ESTATE NEWS] Good morning everyone I am Rumi Dhar from Kama Group.|
Here I have important INDIA real estate news to share with you which is as mention under.
Demand forecasting in real estate has always been a puzzle for economists. Economics
suggests consumption products like iPhone, cars, mobile data, have a falling demand curve
which means as price falls their consumption increases.
For investment products like equities, as prices fall, trading volumes normally come down
indicating lowered demand. However, when it comes to real estate, demand forecasting
becomes a complex exercise, some buy homes for consumption, some for investment and
there are others who look at homes for investment-cum-consumption. Therefore, demand
forecasting has always remained a puzzle. However, a broad-based analysis can definitely
throw a good amount of light on the expected trend.
A. 30-year empirical evidence
A 30-year period is generally considered to be a large period to analyse long term trends
Since 1990, there have been three bull runs and three slowdowns in the property market.
Interestingly, all of these have been driven by big-ticket events.
In 1992, the government eased norms for the flow of NRI money into Indian real estate. This
big decision led to the first bull-run in 1993 that lasted till the emerging market crisis of 1995.
During '93-95, many NRIs had their first taste of buying a property in India. Navi Mumbai
was the biggest beneficiary of this bull-run.
The slowdown of late 90s was reversed by the quantitative easement undertaken by the US
Central bank in 2001 after the 9/11 crisis. Many other central banks followed easy money
policies. The free-flowing money found its way into Indian real estate, largely through FDI in
real estate. This triggered a historic real estate boom that lasted till the US housing crisis of
To fight the housing crisis, the US government propelled a massive liquidity push. With many
countries following the big daddy, the global liquidity again found a way into Indian real estate
through Real Estate funds, HFCs etc. So post-2009, we again saw a major upswing in realty
prices coupled with huge volumes.
And then in 2016-17 came in the Triple Trauma for real estate developers (Demonetisation,
GST and RERA). This led to a big slowdown in real estate markets across India.
After Covid-19 hit, we again have a scenario where most of the Western economies have
developed oceans of liquidity. This has made yields on treasury bonds close to or below zero.
Therefore, in all likelihood, one will see this surplus money making inroads into Indian real
estate during the next twelve months. The only possible outcome will then be an upswing
in real estate by 2022.
B. City-specific analysis
While the real estate market in every Indian city has its own character but most large cities
have followed the Mumbai market. Since Mumbai remains the largest real estate market, it
will continue to determine trends across India. Most local indicators in Mumbai now confirm
the impending bottoming out of Mumbai market.
Read more at: hhttps://www.moneycontrol.com/news/real-estate-2/why-indian-real-estate-market-will-bottom-out-in-2021-6229271.html
Have a nice day