Property prices are likely to come down
Housing demand had increased last year after economic revival boosted consumer confidence and banks introduced teaser rates with lower interest cost for borrowings. Sensing better demand, builders had increased prices between 20% and 35% across the country.
Property prices are likely to come down in 2011 making it more affordable to own a house, as rising cost of home loans will temper demand. Realty Experts expect some further weakening of house prices during 2011. The correction process has already begun in overpriced locations of Mumbai. The same dynamics will be seen in all cities.
Property prices in Gurgaon are likely to see minor correction in 2011 as it has already reached high price points. One of the reasons why property prices revived swiftly after the price crash two years ago is the return of financial investors or speculators who create an artificial demand as soon as a project is launched in the hope of making a profit by selling to buyers at close of building construction. These investors had re-entered the market in early 2010 but their interest has also started waning at the end of last year, a chief executive officer of a mid-size realty company said on condition of anonymity.
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