Property Prices To Stand Stable; Fall Seems Unlikely

by Paul Joseph on February 5, 2013 · 0 comments

Property prices will remain stable in the Indian market for a quite long while as there is no chance for any price-fall in the near future or around. Real estate experts opined that there will not be a fall in the property prices in the near future. Though they opined that there will be no fall in the near future, it seems that there will never be a fall in future. All odds seem stand against the prospective buyers as there is no chance for a fall in the property prices. It is really a piece of bad news for the buyers. Yet they may be interested to know why and how the property prices will remain stable . Real estate developers have developed projects with loans from the banks and other financiers. The interest rates for their loans are already higher and are still increasing day by day. Some private equity firms have lent the builders loans at 25 to 30 % interest rate per annum. Despite their loans and interest rates the builders remained ready to sell their properties at lowered prices. This was because they have realized the fact that the sky rocketing property prices had hurt the sentiments of the buyers. Moreover they were forced to lower the prices because their properties remained unsold. There was nobody to purchase their properties. So there was no resistance from the parts of the builders. Then who resist the fall of property prices? Interestingly some banks and financiers will be affected if the property prices are lowered. Before RBI limited the home loans to 80% of the total amount, some of them had lent the buyers up to 100%. In some cases they had even lent more than 100%- including the Stamp Duty Charges and other registration charges. So if a fall is to come then they will be affected. Property investors will be also losers. If the price fall happens then there will be no investors to invest in the real estate sector. If there is no investor then the builders will never be able to finish up any of their projects. The builders are mainly dependent on the investors and they never wish to hurt investors’ sentiment. All the more those who have second or third–hand properties also will not offer their properties, if a price-fall takes place.

[via India Real Estate Monitor]

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