Here’s Why Real Estate Prices aren’t going Down
- Will property prices fall?
In the wake of the coronavirus pandemic, the question for most home-buyers is whether property prices will fall to merit purchase even in these difficult times. But even though demand is almost stagnant and inventory of unsold homes continues to pile up, there seems to be no significant correction in prices.
- Price correction
As ET Prime reports, “Residential real estate prices in the top seven cities in India have seen a marginal rise in the past 4-5 years. This is lower than even the inflation rate,” says Ramesh Nair, CEO and Country Head, JLL India.
- An inflationary economy
“I don’t think need-based homebuyers should hold back as prices have been stable in India for the past 5-7 years, which in an inflationary economy signifies a price correction,” says Anurag Mathur, CEO of real estate consultancy Savills India.
- Host of factors
Buyers must understand that real estate prices depend on various factors like location, quality of the projects and stress level of individual developers. A further price correction would be possible only if there is enough headroom available to the developer or he is under stress, reports ET Prime.
- Suppressed demand
Ratings agency India Ratings has also said demand for residential real estate could remain suppressed in FY21 in light of the increasing downside risks to the country’s economic growth. Demand-side risks, combined with rising uncertainty over credit availability, could add to refinancing and liquidity risks for developers, the agency said in a recent report.
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