Real Estate Prices Set To Fall?

With major real estate players cutting down the prices on some of their properties, looks like the bubble is finally bursting.

DLF, the largest real estate player has reduced the prices by 25% for their upcoming property in Chennai. More and more builders especialy the smaller ones are finding difficult to sell at the prices which some say were unrealistic.

With the credit squeeze enforced by RBI sometime back on the real estate sector, the business cycle is set towards a downtrend. With reports coming in from US & Europe, regarding the subprime lending woes, the financial market in India has already gone into tizzy without analysing the real implication of the same on the Indian real estate sector. Emaar, a Dubai based builder and maker of the world's tallest building at Burj Dubai, is also facing the heat resulting in the share prices dropping to its lowest in 3 years.

So will the inevitable drop in prices benefit the consumers? Not immediately, say experts. When the prices take downward trend, consumers typically wait for the prices to bottom out. With the investors vanishing in such scenario, only the genuine needy customer takes the plunge. The situation would then improve for the builders when the interest rate on home loan starts reducing and demand becomes buoyant again.

While it is not a doomsday scenario for the builders, atleast not yet, certainly the grass is not as green as before.

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