Update On Indian Property Bubble 2011
Property market is predicted to witness a glut in 2012–13 owing to steady new launches at a time when sales are extremely slow, according to Indian real estate consultancy Jones Lang LaSalle India as reported on Navyroof.com.
As of April 7, 2011, Navyroof.com. featured an article Mumbai residential property set for fall of up to 35% by Jones La LaSalle which says property in Delhi and Mumbai could fall by as much as 35%. The reasons for this is Indian property developers who bought land at high prices are now having to bring prices down considerably and of recent residential sales about 65% of flats in Delhi and 35% in Mumbai have gone to speculators according to Jones Lang La Salle.
Some Delhi commentators such as Prerna Agarwal. feel the Indian property market needs to be looked at in context of the overall economic situation in India and the local real estate pricing trends prevalent in a region. The Indian economy is booming with an annual GDP growth rate of 8.5- 9% creating a class of potential investors with significant disposable income. As housing remains a concern in major metro cities, sufficient demand generators for residential units are there for the next decade and expect prices to rise 10–15% in India in next five years.there is no possibility of salary increases in the short term and middle class will endup in paying their 20 years of earnings to own a home which is very high comparing to their western counterparts.The lower middle class who are not able to afford housing will tend to look for rented houses which put pressure on rental which also pushup the inflation further .The money generated as part of selling should be controlled by the govt and thereby get the taxes.
Although there have been studies that have shown that in 2010 the time was right to invest in Indian real estate. Its been reported Indian property prices could fall 10–15% by Diwali 2011.
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