Despite the lucrative offers and property sale, real estate investment in India is still in a stagnant position with no signs of moving in an upward direction. This is really a serious situation to worry, as builders who are frantically looking to clear out the existing inventory by luring buyers with exclusive payment plans like subvention schemes or offers like gold coin or gold voucher, ipad or even a car. But buyers are still not showing positive signs or interest in buying or invest in the real estate market.
This is because the buyers are playing the cautious game. Home buyers are expecting more price cuts, concessions, more financial flexibility and thus are willing to wait. As the buyers usually think that if the interest rated gets reduced, the loan becomes more feasible and the price of houses also decreases. With RBI reducing the repo rate thrice in six months, it is the benefits attached to the rate cuts that is stopping the buyers to immediately make the buying decision.
Apart from this factor, there is another aspect as well, due to which buyers are sceptical towards investing in the real estate sector in India. The under construction properties are the one which comes in the affordable range, but there is no certain time of the project completion and delivered to the buyers. It might take 24 to 48 months or even more. And it gets very tough for a buyer to pay the EMI of loan and rent at the same time. Almost every day there are news about the complaints against the builders due to delay in project completion and agitation against them, which make buyers more wary about the buying a property. However, on the other hand, the ready-to-move-in properties have a high price tag and are unaffordable.
The present condition of the real estate sector in India clearly shows a huge number of inventories left across the major markets. NCR tops the list with 321.68 million sq ft that is the highest number of inventories. It is followed by Mumbai Metropolitan Region that comprise of 192.27 million sq ft. These inventories will take about 3 to 6 years to get cleared out. Among all Bangalore has performed the best, but it also has 152.43 million sq ft of inventories left. These numbers scare the buyers as well as the developers, which hold them back to take the buying decision and thus resulting in the decrease in sale and demand of properties. And this decrease will further push the developers under more debt who are already under crisis for the past few years.
Therefore, the real estate players in the country along with the government should think about taking up some major step to improve the current status of the property sector while pushing up the buyers sentiments.