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Plagues in Indian Real Estate

Real estate is one of those markets that have contributed immensely to India’s GDP. Its share of the economy, this year, is estimated to be a pretty good value: 6.3%. As per the market analysis, this shall help in giving employment to the staggering eight million population of the country. With such a lion’s share, the property market can be attributed to playing a major role in socio-economic development. The lucrativeness and the long-term gains are a few reasons why real estate attracts developers, brokers, entrepreneurs, and end-users. In spite of all this, Indian real estate, at present, is not that stable as it should be. Let’s us see what’s ailing it and how.

  1. Skyrocketing Prices: The property prices in several metropolitan cities like Delhi, Gurgaon, Noida, Mumbai, and Bangalore have gone through the ceiling. It has become almost impossible for the people from lower and middle-class segment to put their disposal incomes into investment.
  2. Fraudulent Practices by Developers: The developers and brokers, to garner more profits, have resorted to several unscrupulous practices. Their nexus with politicians and police provides them a bulwark for their corrupt practices. An average Indian buyer, being ignorant of the nuances involved in transactions, end up getting duped. Several cases of fraud have come up in news lately.
  3. Hindrances in Price-Correction: The main problem with real estate in India is its inability to allow the prices to correct. The builders and landowners are wary of the fall in rates, and to implicate the buyers, they create artificial demand market. It is due to the hype that they create that the prices are never able to fall back to correction.
  4. Highly Non-regularized Market: Indian real estate suffers from non-regularization: there are not enough laws that could bring the much-needed transparency into the system. This paves the way for unauthorized constructions and poor safety measures. In the month of July, Mumbai saw the collapse of many multistory structures in different parts of the city, killing several hundred. Though the government authorities are now trying to bring about the regularization, a lot is still to be accomplished.
  5. Abnormal Demand-Supply Ratio: As the property prices are stupendous, buyers are now refraining from investing into residential and commercial spaces. This has left a plethora of unused inventories in several cities. Unless the prices get corrected, this imbalance between supply and demand shall continue plaguing real estate market in India.

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