Real estate market is a very volatile sector in pricing terms and it is very difficult to time the market. The opaque and unorganized property market allows manipulation to take place and keep the prices artificially inflated. Studying the property trends becomes necessary to gauze the prevailing price in the market.
Last few years have not been very favorable to the property market due to gloom in our economy. The demand for property has been on the decline due to the very high cost which has been inflated by the builders and developers. They are not willing to slash down the prices to reap the benefits once the market starts to move uphill. Such a situation has led to piling of the inventories.
The out of blue returns in the last decade has led to the erroneous belief among the middle class that property will continue to generate handsome returns regularly. The speculative purchase does not signal a good trend for the property market. Most of the purchases are meant for resale to profit from price appreciation.
Now that the price appreciation is not happening, people will be ready to sell them at discount, ultimately leading to a market correction.
The economic factors are not in favor of robust growth of the property market in near future. The economic slowdown is dampening the spirit of the buyers, bank’s lending rates have gone up with increased inflation, rental yields are at its minimum level and the income growth has not been at par with the increase in the property prices.
Financial sectors are slashing headcounts and the IT sector recruitment are happening at the entry level. The entry-level employees cannot afford to purchase houses.
According to the real estate experts, the revival of the property market will not happen simultaneously with the economic revival. The increase in property prices even in the backdrop of economic slowdown has already factored in any revival in the economy.
Conclusion
Hence, it will take time for growth to take place. Instead, the market is heading for a price correction. This is a good sign for the end users who are planning to purchase homes. They can do so once the prices start to come down.To know more visit www.propknack.com.
