Authored by: Ajit Panicker
Real estate industry is the next big thing, it is a revolution, was the belief which everyone in the financial market, economic stardoms of the country, and various trade pundits had in the year 2007-08. The last week's article in one of the leading newspapers in india claimed that the 77% of the project due to be given possession to the investors in 2012-2013, are not yet ready and near possibilities of that happening is also dim.
Is this an after effect of the recessionary movements in the economy or for that matter even at the global level, my understanding and for that matter any layman can understand that this is purely a misjudgement by many and wrong decisions taken by major stakeholders in the real estate industry, including the reatil investors.
No product in the market can sell till the buyers are there, and as basic understanding of economics says that the excessive demand will lead to shortage of supply, is a misnomer here. Misleading excessive demand lead to the flocks of retail investors to invest, a marketing gimmick and which has finally lead to a condition where there is an excessive supply.Many projects conceptualized are not able to start because funds are not available with builders and the credit reputation of the builder is not allowing the banks to grant funds.
what will happen next?
The middle class group of people who have majorly invested in these projects are at a crossroad where they can neither move forward nor backwards , it is a loss-loss situation. if they get the possession late, they will have to pay the bank' emi's and the interest and would be in a loss, and deciding to go back on their decisions would be too late.
so what is the solution?
Read the next post
Real estate industry is the next big thing, it is a revolution, was the belief which everyone in the financial market, economic stardoms of the country, and various trade pundits had in the year 2007-08. The last week's article in one of the leading newspapers in india claimed that the 77% of the project due to be given possession to the investors in 2012-2013, are not yet ready and near possibilities of that happening is also dim.
Is this an after effect of the recessionary movements in the economy or for that matter even at the global level, my understanding and for that matter any layman can understand that this is purely a misjudgement by many and wrong decisions taken by major stakeholders in the real estate industry, including the reatil investors.
No product in the market can sell till the buyers are there, and as basic understanding of economics says that the excessive demand will lead to shortage of supply, is a misnomer here. Misleading excessive demand lead to the flocks of retail investors to invest, a marketing gimmick and which has finally lead to a condition where there is an excessive supply.Many projects conceptualized are not able to start because funds are not available with builders and the credit reputation of the builder is not allowing the banks to grant funds.
what will happen next?
The middle class group of people who have majorly invested in these projects are at a crossroad where they can neither move forward nor backwards , it is a loss-loss situation. if they get the possession late, they will have to pay the bank' emi's and the interest and would be in a loss, and deciding to go back on their decisions would be too late.
so what is the solution?
Read the next post
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