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RM Reports

The Real Estate Bubble burst. How true it is!

While talking about the current scenario of the real estate sector, we often hear about one phrase. It is the ‘Real Estate Bubble’. Precisely, it refers to a situation where the property prices are artificially inflated, causing a kind of imbalance of demand and supply in the market. Experts generally reason this phenomenon for decrease in demand in the market. They suggest that the demand will increase only when this artificial inflation is cut down. In other terms, when the real estate bubble will burst, the demand will automatically rise.


Has the bubble burst happened!

As per a recent report issued by Anarock Properties Consultants, the new housing launches have grown up by almost 50% in the second quarter of the year 2018 when compared with the preceding quarter. The repost also suggests that Unsold inventories have reduced by almost 2% in the second quarter.  On the sales front, the housing sales in the top seven markets rose by 24% as compared to the first quarter of the year 2018.

The figures clearly indicated return of home buyers into the market. Has the bubble burst really happened!

Devil lies in the details

Well, it seems that the market has corrected itself and the buyers have returned to the game. However, the report by the Anarock Property Consultants further explains that the pull in the new launches, as well as the increase in sales figures, are solely guided by the Affordable Housing segment. The launch of new properties below Rs 40 Lakh bracket has increased by almost 100% in the second quarter. Clearly, there is a demand for affordable properties.

The developers are still struggling to sell properties falling in the bracket of Rs 80 Lakhs and above. This category of premium and luxury properties account to almost 80% of the total unsold properties across India.

If we say that the prices have corrected, we would be wrong. The developers have, instead, added freebies and discounts of additional features, but have not reduced the property prices. The prices in NCR, MMR, Bengaluru and other parts are still the same what they were a year ago.

Let the Affordable rise

Looking at the current scenario or the real estate sector in India, it seems that the luxury market has taken a back seat. The Affordable Housing segment is actually driving the overall growth and why not. The buyers understand the true value of their properties. New developers are entering into the affordable segment in huge numbers, causing tough competition. And the government is also focused on promoting the affordable segment. After all, it has to fulfill its ambitious dream of housing for all.

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