For retail investors, the wisest decision is investing in a home
automobile market, which is certainly ‘driven’ by young, aspirational and demanding consumers. There are striking points of comparison between the automobile and real estate sectors. Volumes, features and price points are key similarities in both. Sales in both sectors depend on the right sizes, configurations and price tags of the products. A reduction in the cost of borrowing has a direct impact on the buying patterns and trends in both sectors.
Most research reports highlight factors such as over-supply and low absorption. Many find this worrying and take a cautious approach. Volume and supply trends differ from location to location, and market trends vary between cities. In other words, there is no way to generalise when it comes to property investment viability.
Cities with a high level of job creation continue to see high volumes of real estate supply and absorption. Cities with few or no economic drivers to spur the growth of employment fall behind. Earlier, Mumbai and Delhi attracted the most talent from rural areas. Today, it is IT-centric cities like Bangalore, Hyderabad, Pune and to an extent Chennai, are now emerging as whole new real estate propositions as IT companies there are expanding their operations.
With inflation and construction costs moving northwards, the price trends are changing dramatically.
The graph clearly indicates that supply trends in real estate have are in a state of flux. The supply of products priced below Rs 3,000 per sq ft is reducing markedly. From 43 per cent in Q4 of 2009, supply
Be the first to comment.
