Why Property increased so high ? And who is going to benefit from this property boom ?

Question

Property market in Year 2001 -2004 was quiet Ok , People were able to buy Flats in reasonable rates . Year 2005 -2006 , Some of the well known builders started the rates boom , flat which was at the cost of Rs.900 Sq Ft now became 2200 to 2800. Same Scheme/Area , Flat sold at 10 Lacks Now selling at 25 Lacks. Last Year , Bank gave the loan's at flexible mimimum rate,Now Banks has sufficient number of customers , (Trap) Slowly Banker's increasing interst at % 0.5 every month . IT People Who bought house for 22 Lacks for 20 Yrs , Now became 23 Yrs with raise of 0.5 % .

Answer 1

A rise in real estate prices in India is an indication of a rapidly growing economy. When more people begin earning more money they spend more and many try to invest it in real estate, giving rise to a greater demand for saleable properties. This has led to the current rise in real estate prices.

Answer 2

Real Estate Prices in India especially at places like Gurgaon are set to double in next 2 years-You can note my words in your diary.
So the assessment made by you that they are already so high is patently wrong.They are still low.it is only 20% of investment which has yet been made in real estate and 80% is yet to come.The Prices of apartment are going to be in the range of Rs.5000 to 6000 per square feet.
Over 500 MNCs are set to set up offices in India in next 2 years.More and more NRIs want to invest in property.Even Indians dont want to keep money in Bank due to lower interest rate and tax implication.Moreover,rising pay packets of MNC employees have also fuelled the prices.

Answer 3

First off the government is receiving a lot of new taxes from sales,that being said they are looking the other way to get there $$.

Next the real state is making there share by selling out the public also,the bank allow this so they can make there short terms gains.

Yep there is a big is the making. this web site show how the bubble is made and from that you see how the bubble will break.

http://www.breakingbubble.com/index.htm

Answer 4

Its shot up because of two reasons.
1. The government in 2003-04 wanted to promote the construction and housing industry, hence floated policies to ease home loans. This boosted the market, because it brought in loads of money into the construction industry. Since finance was easily available to prospective buyers, builders/ developers began cashing in on the good times by jacking up the sale prices.
2. During this boom, the government also started cracking down on black money and hawala marketeers. These people had to get rid of their 'illegal' money in a 'legal' manner. Hence they started investing heavily in the property market - buying multiple properties. They invested only to speculate - buy cheaper now, sell dearer later. They had no problem meeting the high prices that builders demanded, hence the builders kept increasing their prices further.

This entire price escalation is based on a false boom. Wait for another 3 years. The prices are bound to come down. Thats because around that time, all property purchased since 2002 will be approaching cut off time for registration of sale deed. Once that happens, the prices will fall, because no investor in his right mind will dare to register his property for the actual cost he has paid - because 1) he has no proof of payment-since most of it was black money, hence cash 2)he would have to pay property tax based on the registered cost of his property. So they would have to sell out before the registration cut off date - and would have to sell for whatever price they get.
Also, now the home loan interest rates are going up again. Fewer people will avail of loans. Demand will fall slowly. Builders would have to cut prices in order to sustain.

Its all a viscious cycle of demand and supply.

Answer 5

Those in the real estate business. This is a good investment. Prices of real estate are steadily increasing. Good businessmen should invest in land and properties.

Answer 6

I think it is because all the real estate funds and real estate investing companies are buying up in large numbers, raising prices, and selling back with huge profits.

Answer 7

people in artwork can particularly locate the money for rents as much as the cap point because of the fact they could additionally declare housing income if their income is low adequate, the capture is they do no longer seem to be left critically better off than they could be on reward yet they do no longer seem to be worse off if the hire is in the cap point, even regardless of the undeniable fact that housing income is decreased if the guy has discounts over £6000, so as that edge of the argument the government has used is cheating for a start up. yet another element this is oftentimes ignored is that a lot of people, whether they have been residing in 'aspects they could locate the money for', observed cuts of their housing income final year because of the fact the eligible rents have been replaced from the 50 to the 30 percentile. deepest renting with housing income turn into additionally pushed as a coverage from the Seventies onwards instead to governments having to maintain up with the call for for social housing, a lot of tenants in deepest rented with housing benenfit could have been eligible for social housing if it were geared up, and maximum richer boroughs in London have some social housing as properly so it turn into no longer unreasonable for councils to tell them to hire privately interior the borough. because of the fact of spiralling rents brought about with the help of the out of control property enhance, the tenants who did no longer reason it and have been only doing what their community authority informed them to do while they utilized to flow on the housing record, are actually being accused of greed and are predicted to relocate and effect on the poorer aspects that have adequate issues of their very own besides, no ask your self a Housing association in Stoke-on-Trent mentioned 'no' while the London Borough of Newham approached them.

Answer 8

The developers will benefit.