I think by now, everybody, at least in IT and realty business, must have heard about Noida. Well, this is the city where I work and live and this is the city which has witnessed almost 4 times real estate appreciation in last 5 years. BPTP bagging the Noida land at awesome 5006 crore gives you an idea that investor's appetite hasn't gone down as such. Such euphoria reminds me of the same Dec/Jan for stock market.
Needless to say that real estate is lot safer than stock market but nobody is sitting out there who can guarantee you returns, especially in such global economy downturn. There are some pockets of real estate which have been virtually sitting at the same rates as they were in 1 year ago. Real estate developers and property brokers have formed such a net that they are not letting the euphoria coming down. If brokers are unable to create that aura, they will be out of business and might even be looking up to losses, assuming they themselves had invested heavily in real estate. Right now, their aura is as shiny as summer's sun in the noon because recently launched DLF's project near Manesar was reported to fully subscribed in flat 6 hours.
You can easily refer to the US, UK and Chinese and even Spain real estate and what happened to the entire housing sector starting first quarter of 2007. Reading this article on US real estate make the entire scenario look more gloomy but looks like this is what is happening.
Reading the ET Estate or speaking to real estate agents paint you a rosy picture but looking at global scenario, I wish to ask a simple question WHY India's market should be different? I think India's real estate bubble has already grown too much and maybe it's high time that government comes in with tighter controls to curb the real estate inflation. If RBI can follow China in increasing the interest rates to curb the inflation, moderate liquidity and slowdown the economy boom, they may also do same as China did for real estate sector.
Needless to say that real estate is lot safer than stock market but nobody is sitting out there who can guarantee you returns, especially in such global economy downturn. There are some pockets of real estate which have been virtually sitting at the same rates as they were in 1 year ago. Real estate developers and property brokers have formed such a net that they are not letting the euphoria coming down. If brokers are unable to create that aura, they will be out of business and might even be looking up to losses, assuming they themselves had invested heavily in real estate. Right now, their aura is as shiny as summer's sun in the noon because recently launched DLF's project near Manesar was reported to fully subscribed in flat 6 hours.
You can easily refer to the US, UK and Chinese and even Spain real estate and what happened to the entire housing sector starting first quarter of 2007. Reading this article on US real estate make the entire scenario look more gloomy but looks like this is what is happening.
Reading the ET Estate or speaking to real estate agents paint you a rosy picture but looking at global scenario, I wish to ask a simple question WHY India's market should be different? I think India's real estate bubble has already grown too much and maybe it's high time that government comes in with tighter controls to curb the real estate inflation. If RBI can follow China in increasing the interest rates to curb the inflation, moderate liquidity and slowdown the economy boom, they may also do same as China did for real estate sector.
Cash is King in 2008.
~ Navjot Singh Sohanpal
1 comment:
I would be more than happy to see a slowdown in Indian property prices, atleast people like me would be able to buy something ;)
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