Will Indian real estate become affordable?
A large number of home buyers in India are awaiting reduction in property prices to get the best real estate deals.
In order to reduce the prices, the Finance Minister P. Chidambaram recently directed all government-owned banks to force real estate developers to lower the prices, which in-turn is expected to beat the economic slowdown.
Confederation of Real Estate Developers Associations of India (CREDAI) insisted around 8000 members to pay more attention to the proposal as it believed that the proposal would support affordable housing and single window system of clearances to speed up the process, and it would encourage banks to reduce interest rates. However, apart from decreasing prices of properties, there are other things which would encourage buyers for investing.
It is a general perception that builders quote high rates to make huge profit. Although developing project for profit is the primary objective, builders also have to spend a big sum of money on other expenditures while developing a project.
Excluding the actual cost of construction, builders will have to shed money for obtaining approvals and permissions from various authorities, during construction the cost of holding land too raises, and thy will also have to cover several external and internal charges, which have also risen.
In case the property rates are reduced, the demand for housing might increase, particularly in locations that are price-sensitive. Mainly, the peripheral and suburban locations would get maximum benefit of price reduction. But developers will end up with no or lesser profits.
If the government of India plans to make key reforms such as to ease bank lending norms, multi-level taxation and implementing special incentives for affordable housing, bringing down cost of approvals, only then there are chances of price-cuts for properties in India.
It has been estimated that there would be a shortage of around 11.8 million residential units for 2012 to 2016 and the property rates are expected to reach sky-high for common people to buy.
At this situation, reducing property rates will definitely influence the demand for housing. In this regard, the only way to keep demand up is by the union of the government, financial institutions and developers in order to find a lasting solution.
Real estate market in Bangalore is still affordable: PropEquity
Affordable Housing, buyers in India, Confederation of Real Estate Developers' Associations of India, cost of construction, demand for housing, government-owned banks, prices of properties, Properties in India, Property Prices, Real Estate Developers, Residential units
[...] Will Indian real estate become affordable? [...]
[...] Will Indian real estate become affordable? [...]
[...] Will Indian real estate become affordable? [...]
[...] Will Indian real estate become affordable? [...]