Like any other sector the Real Estate Sector has seen its highs and Lows. In the late 80s till early 90s it was boom time for it. It was a great option to invest in those days as prices got escalated by ten times. After that the market was bearish and in 2002 the properties were sold at half the top price of what they achieved in 1994. Inflation was really high from 1994 to 2002. After that there was another boom in the period of 2002 to 2013 where prices fluctuated between 6 to 10% and investors gained.
Same returns cannot be expected for the future, say the experts. Real Estate Markets being a speculative market are no exceptions to the fact that just like other speculative markets they also go in cycles. It may be called in its corrective phase where it may last for few more quarters.
There is lack of buyer interest as there is a decline in numbers of people buying residential property. The main reason for that the prices are ranging outside the income bracket of people. Many are resorting to Home Loans for the same reason, but their numbers are still less. Right now, only optimally priced properties are garnering interest of home buyers. Home Loan rates did come down by 50 to 75 BPS compared to RBI’s 125 bps rate cut. This could not stir up the demands. The failure of rise in the income has also affected the market substantially.
The crux is that customers buying their dream homes may have a good time right now but experts opine that investors can stay away from it for a little more time to the tune of few years.
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Aman Khanna is an experienced financial advisor who is well known for his ability to foretell the market trends as well as for his financial astuteness. He has an MBA in finance from Toronto University as well as years of experience delivering seminars on sound financial practices and debt management.