Impacts Of Global Downturn On Indian Real Estate

By Author: indiahomes marketing
Total Articles: 112
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In the present global scenario where the national economies are interdependent, Indian real estate market is directly impacted by the prevailing global fiscal dynamics. As a result of the prevailing global downturn, the consumption & absorption of residential as well as commercial real estate properties in India has marginally reduced. Earlier when there was rapid absorption of residential as well as commercial real estate properties, today the deals close at very slow speed. There have been fewer real estate transactions and even though people have financial capabilities, they have gone into a rather speculative mode with their real estate investments.

Mumbai real estate market faces yet another major challenge of very heavy real estate prices. Real estate developers and financers in Mumbai are under stern pressure as the land prices here are so high that the basic cost of building an apartment here is almost double as compared to other metropolitan cities in India. The situation is worsened by sudden hike in construction raw material costs. The prices of cement and steel are at an all time high level. As a result, ...
... the per square foot price of Mumbai properties is very high in Mumbai real estate market. In the light of present prices for property in Mumbai, in spite of the stern contraction in demand, neither the rentals nor the prices seem to be getting into self corrective mode. The Mumbai real estate market has gone into polarization mode where nobody is buying premium properties due to high prices and rentals, the low cost housing projects face no sales in spite of heavy discounts and add-ups in sales and rentals.

A whole set of negative speculations seems to be prevailing across Indian markets. The sellers and real estate developers are anticipating lack of demand; as a result they are not coming forth with further projects and offers. At the same time, real estate dwellers and buyers are increasing their savings in anticipation for lack of jobs in future. In the absence of poor financial planning and no government intervention it is risky to predict when the downturn shall end. Stern government intervention is requisite for the particularly vital India real estate sector which is going to a really bad phase. In spite of the marginal impacts that India real estate sector generates on Indian economy, the government and the Reserve Bank of India – RBI seem to be taking no greater steps to rescue the industry.

There is an immense demand of price corrective measures for construction raw material like steel, and cement. Steel, and cement prices have doubled in the last three years. It is due to the off late hike in petroleum prices, the raw material transportation costs have doubled as well. As petroleum prices impact the prices of every commodity (tangible and intangible), in India and abroad, the government’s move of taking subsidy off the petroleum prices has badly impacted Indian economy. A sudden shoot in food prices has directly resulted into high prices for labour services as well.

Author Bio

Nitin Sabharwal is an enthusiastic marketing explorer who redefines prospective subjects for his works in digital advertising & marketing, e-commerce, and content development. With a commanding work experience of 16 years, Nitin’s participation in digital enabled services with a special emphasis on the Internet has earned him several respectable positions in India’s premier companies. Positioned as VP-Marketing of IndiaHomes, Nitin is maneuvering the company’s branding, Performance, CRM, Contact Centre, Event Marketing and Digital Marketing. Academically, he holds an MBA degree from IMT Ghaziabad. Mumbai real estate market, property in Mumbai