Factors That Play Major Role In Setting Up Price Tags In Real Estate India

By Author: Skye Luxuria
Total Articles: 34
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With so much of talks on real estate investment,as a normal buyer it always makes me wonder how the prices are set for a particular property in Indian real estate.Why that property in tier 1 cities like Delhi,Mumbai,and NCR are just impossible for a resident of tier 2 cities and what is making tier 2 cities like real estate in Indore to see evident growth?

Institutional investors,banks and insurance companies offering an environment of low interest rates,gathered money into the market, raised the purchasing power of the common man and allowed him to look beyond expected asset classes.Office,multifamily,industrial and retail properties are included in this giving a broader frame to real estate.

This may seem a little theoretical and based on certain factors but one can't deny that these all are very much responsible for that storm in real estate both at commercial and non commercial levels.Occurrence of stabilizing rents simultaneously while improving fundamentals have put an added effect.

So it is thus evident that a slight up and down in all the factors affects the ladder down.If banks increase the ...
... interest rate on home loans this would surely put a setback for sales that are made through loans.If the supply in real construction is more and demand is less this would surely bring down the prices to chalk out the stagnancy and loss.

Since the liberalization of foreign direct investments by UPA Govt.In 2005 and SEZ act allowed for private equity funds in the real estate sector of India the industry has been in the bubble territory.Investors of NRI and foreign fund background also seen the opportunity of investments in properties with lower prices in the market.

With population density so closer to Europe the value of real estate in India should also be of European level but it's still cheap.When you compare flats in Bombay of tier 1 belt or flats in Indore of tier 2 belt the 12 to 1400 square feet of built up area would cost between 40 lakhs to 80 lakhs in Indore and 60 lakhs to 1 crore in Bombay.Whereas in Europe or U.S at 2000 square feet of built up would cost 1.5 to 3.5 crore.

Although affordability is one major factor of the price difference here, supply lagging behind demand is one more factor.

So now you can be clear of the factors that put up the price tags on properties.Political conditions of India though play a major role.

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