Residential Properties Fall Within Affordable Range, Says Report
NEW DELHI: According to reports from KPMG and Magicbricks, the prices of properties in India have more than doubled. However, there is a strong potential for growth in the residential segment except in cities such as Mumbai and Delhi.
In the last 3 years, the property prices have actually not increased due to several factors, especially due to inordinate delays in meeting with the timeline. Yet, the market is set to revive in the next quarter or so.
According to official reports, India will become the 3rd largest globally in the real estate sector by 2030. This growth will double its share to over 15% in the GDP.
"Indian property prices have more than doubled since 2007 (without adjusting for inflation)the second best globally," it said.
Some price correction happened in 2013 and 14 after which there the sector seemed to have regained some stability.
For some years in the recent past, there was no notable increase in income for the working class. This has hugely impacted the property prices across the country. However, experts feel that the property prices in India are still at affordable levels compared to its counterparts abroad.
Since the fundamentals such as GDP, urbanisation, income growth, savings rate, mortgage growth and affordability are positive, the prices of properties are likely to increase gradually.
The slowdown in realty business due to demonetization in the recent past has actually pulled the business down in major cities. Yet, the introduction of GST and RERA is set to give a new and profitable start to the industry in the near future.
Reforms like cut in interest rates, interest subsidy, increased mortgage penetration and ease of FDI norms in the sector are contributing greatly to the growth the realty sector. But, things will start changing slowly and to see frution, the government has to maintain pace such as now.
Sudhir Pai, CEO, Magicbricks, said," The urban population is expected to grow exponentially in the next 20 or so years. So, naturally, the demand for houses will increase rapidly to a level where demand will undoubtedly be higher than the supply
Neeraj Bansal, Partner and Head, ASEAN Corridor, and Building, Construction and Real Estate Sector, KPMG, in India said," India has the potential for growth in the realty sector in the next few years which will definitely keep the business booming".
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