FEAR IS NOT NEW
In mid-2015, reports predicted a 50% crash in real estate prices. The logic used, was that the rental yield on real estate is very low as compared to the interest rates on bonds. Nothing akin to the prediction happened. However, the report did create a sensation.
WHY DID THE FEAR FAIL
When the sentiments were against investment in real estate and hence, prices should have down. But, there were also inertial forces that worked against the reduction. Central government, state government, Banks and municipal corporations had indirectly helped stopping the price fall to avoid their revenue loss.
Latest argument for Price Fall:
- The Indian real estate market has been thriving on black money and controlling the black money will impact the buyer base, reducing the number of buyers.
- Absence of black money will result in making the approvals more difficult and result in lower real estate prices.
Arguments for No Effect or Price Hike:
BOTTOMLINE : A closer analysis suggests that prices may only go up, as the arguments, past changes in real estate bills and stakeholders interest, do not support the apprehensions of a price crash.
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