During the last few years, most cities in India have witnessed a huge increase in property rates. The main property markets such as Mumbai, Delhi, NCR, Chennai, Bangalore and Pune saw huge increase in price of properties. Real Estate in India is currently under tremendous disputing phase with macro economic problems such as poor liquidity, rise in cost of construction, high land prices, delay in projects, higher interest rates, etc.
Why property rates in Delhi NCR are High?
The property rates are sky high in Delhi- NCR. But the actual demand for property in these cities is not that high. In a recent survey which was carried out by a district administration, the truth is completely the opposite. This survey shows that there are around 25-30 % housing units are currently lying abandoned, with many more being constructed in these cities. This bubble of fake property demand appears to be a creation of active builder lobby in Delhi and NCR.
The real estate markets in major metro cities are basically investor driven. As per the statistics, about 70 percent of revenue is generated from investors only. This shows that the private builders in major cities such as Mumbai, Delhi-NCR always introduces new schemes and techniques in order to attract and keep NRI investors interested for a longer period. According to the recent infrastructural development survey in Delhi –NCR, various housing projects have come up in last few years with many more are in waiting. These high-end real estate projects always offer value lifestyle to the end-users and attract a lot of investors. This portrays Delhi- NCR as a hot destination for investment which ultimately gives boost to the property rates in Delhi-NCR. This creates huge bubble of fakeness over the rise of property rates. An investor Driven market is less transparent and have lot of complexities. So this type of investement also attracts lot of black money and property rates are touching sky.
If one notices this scenario from the eyes of a property dealer everything seems to be positive and perfect. But the false assumptions and hollowness of this whole activity will soon be exposed in public with its own conclusions. First-of-all, such false supply of housing units will not be able to hold the investors for long. Secondly, the property rates in Delhi-NCR which are currently touching sky might fall down tumbling faster than the rate at which they went up.
Property rates in Mumbai are touching Sky
The property rates in Mumbai are one of the costliest in the world. An average flat in Mumbai costs around Rs 10,000 per sq ft. Also places such as Navi Mumbai and Thane, which are less populated cities have many projects coming up that have flats priced over Rs 1 crore. Taking the slumping sales, burgeoning debt and repayment pressures into consideration, these prices are probably not going to fall soon. Property rates in Mumbai are advancing drastically, making first time buyers shed their savings to purchase a home. Property prices in Mumbai increased by 12% taking it to third position worldwide in costliest markets. The rate at which property rates are rising is beneficial only to real estate business houses. It also demonstrates the current status of Indian economy which is one of the fastest growing economies in the world. The real estate market in Mumbai has provided the highest returns on investment due to which it has always been the favorite aspiration of investors. The properties in Mumbai saw a rise of about 87% in last four years on the basis of poor urban planning and growing connection of builders and politicians in the city.
Political and Builder Lobby connection:
There are many scams and scandals related to property are been exposed over the last few years. Scandals such as Adarsh housing society which is a disturbing fact as well as a red signal to people. The way some state leaders had misused their powers. It was alleged that the land belongs to army and was authorized for housing project for Kargil war widows. But instead it was looted by politicians and army lobby. Various number of Congress politicians, including Ashok Chavan, used their position and power to acquire these apartments for themselves and their family members, which were approved for Kargil war widows.
Such scams and scandals not only increase the scarcity of the properties but also hollow the economy of the country. Due to such scandals, genuine persons are not able to get what was meant for them and suffer a lot for nothing.