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Will the real estate bubble burst ?

 The year 2015 and 2016 looks very uncertain when it comes to real estate. The major concern is all the bubble that has been created around this- will it inflate a little more or will it burst. India is a nation that does not really have a fixed pattern for its real estate market and hence hit becomes a little difficult to predict anything. A newspaper study published how economic instability can make the scenes much worse since there is a high degree of political ambiguity; also the interest rates are really high.


In the last couple of years real estate market in the whole of India has been wavering and hence the prices of properties have been soaring ever since. This makes it difficult for Indians to even dream of owning a property because the income levels are not mounting in the same manner as realty prices. Most of the real estate bubble is a well-planned strategy done by the central banks so that it makes it easier for them to keep the interest rates low. In a city like Mumbai, the market has a distinct feature of its own. 


The demand for properties is high in MMR (Mumbai Metropolitan Region), but again because these properties cost a bomb it becomes impossible for buyers to own a property. The real estate prices in Mumbai are higher than any other city thus making it unaffordable for many people. Also because of these prices instability, the flow of funds also reduced.


But again ever since the government has changed we can still hope for a breather. They have introduced housing for all and have planned to make it happen by at least 2022. Residential properties are gaining popularity among prospective buyers. Also the Reserve Bank of India has also conferred for affordable projects in housing. Many private firms have also planned on the same in many major metropolitan cities like Mumbai, Delhi etc. As years pass, we can hope for affordable housing properties. South central Mumbai is expected to see a rise in many projects –both commercial and residential.


One of the main reasons why these property prices rise is all thanks to the unaccounted black money that India has. But again our new government has already started measures to curb the same. According to an article published, “The latest data for the one year period ending March 20, 2015, shows that lending to the commercial real estate sector by banks grew by 8.9% to Rs. 1,68,000 crore. The overall lending by banks on the other hand grew by a very similar 8.6%.”


Also another study in the Economic Times has said, “Home sales plunged 17% in top six markets last year and unsold inventory level rose to 647,484 units, according to property consultant Knight Frank India.” And at this rate the real estate might soon burst or just fizzle out.  But again markets are always unpredictable. All you can do is maybe trust your broker and the price he quotes. All we can do is wait and watch how the property market fairs in in the coming time.


You can visit ThePropertist.com and search for properties on Sale/Rent in Mumbai. 


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