Had written about a recession in real estate , due in part to the huge overpricing and a sharp fall in demand , thanks to worldwide recessionary trends and a reluctance of the well connected builder lobby to reduce prices.
As things stand now, even after the push/ stimulus package announced by the govt, and policy of making PSU banks offer teaser floater home loans at 8%, no real demand spurt has been seen, as prices are still extraordinarily high, in terms of the infrastructure bottlenecks and getting a loan from a psu bank is not easy (especially evident from HDFC s success).
India is facing its own housing crises .
Some developers including prominent ones like DLF have started to sharply cut prices and offer some sort downside protection to stimulate demand in the housing sector.
But the fun bit is that people are getting organized in Google groups and social networking sites and are choosing to walk away in numbers especially when there is no black component involved to buffer the loss.
|After DLF, Unitech has restive customers to soothe|
As global recession hits big time NRIs will prefer to invest locally in rather than buy overpriced luxury houses in India.
People have lost a lot of money in the markets with worldwide sightings of black swans. Markets have crashed and DLF (182) is quoting at almost 70 % discount to its ipo Price of 525 per share and is quoting at 1/4 of its 52 week high of Rs739.
People are also loosing jobs especially in high paying sectors like hospitality and international airline sector etc and their incomes are dropping from 5 figure salary s to zero.
People are realizing the risk of investing almost all their life savings into a single unproductive asset / house especially when markets are heading southwards and falling valuations and the risks of rising emis on finances and cost.
People are getting acquainted with price to income ratios , wage to rent ration etc and are taking decisions with much more research .
As things stand now Ask now estimates a further correction of 30% from here and the buzzword henceforth will be value buying , affordable housing and low cost housing.
Leaving you with an interesting pic from mintblogs.