The realty party is over as India’s hottest property market is cooling off faster. Exactly as NMTV News had analyzed in April 2008, a recent survey of the property markets confirms that enquiries to buy homes have fallen, with this city registering a 90% drop. And now, brokers expect prices to drop sooner than later. NMTV News weekend report tells you how New Year will bring cheer to home buyers as property rates are set to fall steeply. The word is out on the streets. The realty balloon has burst. Builders who have been quoting such exorbitant realty prices that it completely went out of the comfort zone of buyers of any income group and was beginning to hurt buyers will soon be left with no option but to reduce property rates – that too steeply. According to a pan-India survey of local brokers on the residential property market carried out by Edelweiss, global research analysts, almost 80 per cent of brokers across India have witnessed a reduction in enquiries over the past month and about 90 per cent of brokers in the city have seen a drop in transactions over the past one month. Apart from high property prices, high interest rates have cast a big question on the affordability of a flat purchaser these days. That the lack of demand and growing liquidity crises has developers worried. With banks like Bank of Baroda, Bank of India recently announcing that they will not lend money against property, developers are worried about how to source funds for their projects. Builders are not getting venture capital funds and do not want to go to money lenders because of high interest rates. So, the only option is to either start selling faster by reducing rates. And even though some builders continue to rap that the realty mart wouldn’t be affected by the slowdown in the real estate market as demand in the island city exceeds the supply, the statistics at the registrar’s office expose these lies. Stamp duty registration data show sales volumes till August have fallen 14% year-on-year. In August alone, the drop was a massive 27% year-on-year, the steepest fall in any month this year. Real estate companies and builders across the city are finally feeling the heat of the artificial hype in the market. And there is one point where builders and buyers are thinking alike – they it is time for price correction and realty check. Beyond any doubts, the pending crash that is round the corner will help buyers to invest in a realistic market. New Year will bring cheer to home buyers as property rates are set to fall steeply. There is still a lot of depth in the market but at the right price. Builders will have to reduce their prices. The realty party is over – the faster the developers understand it, the better it will be for all concerned. With Rajeev Mishra and Zeba Warsia for NMTV News.
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