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India being a 3rd world nation has been one of the most upcoming nations for real estate business and investments since last few years. Investors, businessmen, organizations from all over the world have regarded India as a prime spot and destination for all sorts of investments and development. 

Over the last few years there has been quite a change in the real estate scenario in India especially. The land, building, property rates have gone up, declined, again came back to a static scenario. This inflation, deflation has been viewed differently by economists, sociologists, political analysts. The impact has been different for different sections of society.

In India the real estate market has been faltering for quite some time as the country's economy continues to remain under stress. According to data from various sources, property prices have seen a correction recently. In the April-June quarter, house prices fell in 22 out of 26 cities tracked by the National Housing Bank's Residex (residential index) compared with the January-March quarter. It is only the short-term scenario. Despite all the adverse conditions like unemployment, industrial disputes, job issues property prices in most cities have been holding ground for a long time now. For instance, over one- and two-year periods, the index shows a sharp rise in property prices in Delhi, Mumbai and Bangalore.

"The primary reasons for the slowdown are strict monetary regulations due to high inflation, the central bank's new norms for lending to the real estate sector and property prices touching peak levels," says Vineet Singh, business head, 99acres.com, a property listing website.

The real estate sector has taken another blow in India in the last few months. In September, the Reserve bank of India (RBI) advised banks to exercise caution in financing purchases under interest subvention schemes, where the builder agrees to pay the interest for a certain period or till possession of the property. The central bank issued the advisory as these loan products had fine print defining liabilities of customers in case of defaults by developers.

Though the pressure on developers is immense, there are many political pressures and syndicate problems in India. But the real estate market, by its very nature, is localized. There are some unique attributes of each location. Each city has its own requirements and demands. The nature of the people, their demands and requirements are different. 

Prices have remained more or less stable in Mumbai's established localities, according to CBRE, while there has been decent capital appreciation in the suburban locations. "In Mumbai, Western Suburbs, Extended Eastern Suburbs, Navi Mumbai and Thane saw capital appreciation of 8-11% (in January-June) as compared to the second half of 2012. 

Development of suburbs is a major shift and transformation. According to Analysts the property prices will remain under pressure for some time but are bound to rise in the long term. The shortage of proper housing in urban India, suiting the pocket of the urbanites to a large extent supports their assessment.

The financial planners and agents have an important role to play here. They would always suggest to go ahead with the purchase. Owned  house is an asset, helps you save on rent as well as get tax benefits. Investors, of course, need to be more careful. The best option is perhaps to stay away from high-priced properties in favor of more affordable properties according to analysts. 

According to Singh, the Customer behaviour has changed in the last few years. The Buyers today have lost confidence in a developer’s ability to construct and deliver a project on time.

“A developer’s biggest challenge is to regain that lost faith and win the confidence of homebuyers,” he said.

Only 2,600, or 3.35%, of the total 77,460 unsold residential units across Mumbai—a city where buyers prefer ready properties over those under construction—and its suburbs Thane and Navi Mumbai are ready for possession, according to data compiled by property advisory Jones Lang LaSalle India and the Confederation of Real Estate Developers Association of India (Credai).

The property prices of Mumbai, Navi Mumbai are still high in Mumbai, its developers are more financially prudent than those in NCR, said Chhabria. An interesting point is to see how steadily the Interest rates are slowly coming down and affordability is increasing.  Inspite of rising unemployment the property rates or the purchasing power of the people especially of Metropolitan cities like Mumbai, Delhi, Kolkata, Bangalore, Chennai have hardly decreased. 

In the coming years it is expected that developers will hasten the pace of construction and would concentrate on execution of existing projects. The promoters and builders must think of the affordability issues as well. REAL ESTATE is a booming industry. There are scopes of lot of improvements and development. Government intervention and proper execution of the various terms and policies could not only help to develop the real estate scenario of the nation but would also contribute positively towards the economic benefit of the nation. 


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