Unrestrained speculative buying can kill the market
This speculative behaviour is similar to the trend followed by middle class Americans pre-2008
Jun 25, 2013
Source : The Times of India

 

MUMBAI: With the Mumbai real estate re-sale market touching hitherto unseen heights, questions about how sustainable the real estate bubble is are being raised more so now than ever.

In the last couple of years investing in property has been the surest bang-for-the-buck for Mumbaikars. On an average property prices have more than doubled and re-sale of property has been a mode of quick profit for several investors. Thus, heralding the rise of professional real estate investors whose numbers have increased with time. And this according to industry observers is not a very positive trend.

“The professional investor typically invests in property at the pre-launch or under-construction period, only to sell it at a later date. But to make a sale he needs to price it below the one quoted by the developer. And this is where the problem begins,’’ observes Jayin Patel, Proprietor, JP Real Estate Agents and Developers. “Speculative buying beyond a certain limit will kill the market. It is like cutting the branch you are sitting on.’’

With increase in the number of investors, about 60 per cent of a project is booked by this segment. Any further increase by this segment is likely to have a big impact on the market.

“This speculative behaviour is similar to the trend followed by middle class Americans pre-2008. And then came the crash! On a similar line though not so drastically, the Mumbai market too can witness a correction, if the increase in speculative buying is not stemmed,’’ observes a well known developer, who did not wish to be named.

There are already increasing signs that the dream run enjoyed by the real estate segment in the past few years may be slowing down. Developers off the record talked about slowing down of direct sales to the end user, and the rise in inventory.

But while the going is good, everybody is happy booking profits and market observers predict a smooth sail for some more time.

The factor working in Mumbai’s favour is the extensive infrastructure development projects and the consequent improved connectivity like the Monorail, Seawood-Uran suburban rail network and the Eastern Freeway Project. Will this key factor be able to hold up the real estate industry is yet to be seen.

Latest Realty News

Bangkok cheapest office location in Asia; Hong Kong most expensive
Jun 25, 2013
BANGKOK:Bangkok was the cheapest city for office rents in Asia this year, while Hong Kong was the most expensive, an international property consulting company said on Monday.
Ulwe outperforms in the Uran-Ulwe stretch
Jun 24, 2013
MUMBAI: The long stretch from Uran to Ulwe in Navi Mumbai, covers many areas which have witnessed spurts of real estate development but the one area which has emerged as a clear favourite of developers and investors, is Ulwe.
Affordable properties in Ravet-Tathawade
Jun 24, 2013
PUNE: If you are looking for an affordable abode in Pune, the stretch from Ravet to Tathawade could well be your choice of destination. Starting from Ravet through Ravet Village Road, Kalewadi Main Road and finally Tathawade, one can find new residential projects by Lodha Group, Bhojwani Homes and Goel Ganga Developers, coming up in another two to three years.
Blend of peace and progress has boosted Nashik realty
Jun 24, 2013
MUMBAI: Once known as a temple city having religious importance, Nashik has grown by leaps and bounds to become a bustling mini-metro. In the last few years, its skyline has changed with high-rise buildings dotting the landscape.
CREDAI bats for realty reforms with Girija Vyas
Jun 24, 2013
DELHI: Praising the Union Government’s efforts towards real estate reforms, realtors’ apex body Chairman Lalit Jain expressed the hope that the new Housing and Urban Poverty Alleviation Minister Ms. Girija Vyas will continue with the unfinished task of her predecessor Mr Ajay Maken.
Loans for home buyers, builders to get cheap
Jun 23, 2013
MUMBAI:In order to give a fillip to the housing sector at a time when the economy is facing a slowdown, the Reserve Bank of India on Friday announced two measures that will increase flow of bank credit to builders/developers and individuals buyers.
South Mumbai property rates crash 30% as buyers miss the ‘view point’
Jun 22, 2013
MUMBAI: Marquee apartment buildings in south Mumbai with views to die for (of the sea, the Queen's Necklace, the Race Course) fetched its owners unheard-of prices till a few years ago. But not any more as new apartments which tend to block the views are depressing property values by up to 30%. The art deco Kamal Mahal, which was once the home of the Ambani and Godrej families, on Carmichael Road now has the high rise Imperial Towers by Shapoorji Pallonji on its east side blocking the view reside
Maximum demand for 2BHKs in Dhanori
Jun 22, 2013
PUNE: Dhanori, located along the eastern side of Pune, is becoming a popular destination for those looking for 2BHK units. According to data with MagicBricks.com, in Dhanori, 2BHK apartments accounted for the maximum supply at 49 per cent during the Jan-Mar 2013 quarter.
Condominium concept popular amongst Mumbai middle class
Jun 22, 2013
MUMBAI: Nina and her husband are working professionals with two school going children. Her apartment complex recently signed up a Property Manager, who gets the household chores done, including delivering lunch for the two children and her by 7.45 am.
Credai hopes efforts on reforms will continue
Jun 21, 2013
MUMBAI: The Confederation of Real Estate Developers’ Association of India is hopeful that the new Union Housing Minister, Girija Vyas, will continue the unfinished task of her predecessor on reforms.

Latest Realty News Of State

Realty Talk's