Until a few years back, it was indisputable that real estate is one of the most flourishing industries. It does not stand true today, as property prices are falling. The real estate industry is witnessing a setback never experienced before. The Indian real estate industry is currently witnessing a drastic fall in property prices in many metro cities. The reasons for this can be cited to too many political and economic changes. We are listing the ones that have a direct impact on the falling property prices in India. Let’s read on-
- More supply than demand
The rise of the real estate industry was witnessed owing to the huge demand. However, with time, while the buyer proportion has remained more or less the same, there has been an increase in the supply. There are hoards of real estate agents, brokers, companies, and builders in the market today. Also, as the metropolitan cities are facing huge migration, the property prices in the rest of the country are gradually decreasing
The Indian economic received a severe shock with the introduction of demonetization in November 2016. Despite many arguments about its pros and cons, one outcome that was agreed on was that it sucked the cash out of the system. The economy became more digital, following which the unaccounted income which was otherwise absorbed by the real estate investments became unavailable. Every real estate investment is now subjected to taxation. Hence lower property prices and lesser investments altogether.
3. Changes in the job culture
Various reports and surveys
4. High mobility
Investment in properties makes sense only when the buyer is patient and has long term plans of staying rooted. Even if a buyer invests in a property intending to put it in the market, the profit margin is really less. Life is fast and mobile these days, which is resulting in a decrease in property prices.
5. High price rise in the past
During the early 2000s, property prices in India saw a rapid rise, however quite irrationally. These prices have remained more or less stagnant in recent years. These include properties in many crucial locations in many metro cities across India as well. The prices set randomly a few years back have stayed the same over the years.
Any property, be it residential or commercial has its own cycle. Property prices are not universal all throughout the country and are the reflection of several factors affecting them.