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market correction is likely to affect real estate prices across the country, especially in housing and land in Mumbai and Bangalore, according to industry analysts.

Land prices in these markets are also likely to see a downward correction. This, combined with higher interest rates could lead to effective market in a situation in which transactions in the next three to six months will decline, analysts say.

According to Arun Goel, CEO of venture capital fund DHFL real estate, these markets were due to a correction for some time, and this could very well be the trigger.

“There was much speculation in real estate, given the excess liquidity from the market in the last two years, and this has led to reasonable price levels in the suburbs of Mumbai and Bangalore. Noida Gurgaon and saw such increases, but have seen a downward correction stock market correction could well lead to real estate prices fall by 15-20 percent in these markets over the next three to six months .. offers land could see a correction of 20 percent, “he said.

In the last year, residential prices in the suburbs of Mumbai and Bangalore, has increased considerably, in some cases up to 30 -40 percent. Mumbai areas like Bandra, a western suburb, saw prices touching one crore mark a RS residential floor, which was taking R 65-70 lakh in just a year ago.

Put another market analyst, “While real estate investors are a different class from those who invest in capital markets, we could see a situation where the number of transactions in the market to decline for three six months, such as liquidity, generally, will be seriously affected. “

Reserve Bank of India have tightened lending standards by increasing the risk weightage for housing loans at 150 percent and hiking provisions for loans to banks for building projects.

Niranjan Hiranandani Hiranandani tall building, “People who were planning to make RS 35 lakh loan based on their income from capital market will now have to consider a larger loan. Given the increasing rates may defer interest, therefore, investment, for a short period of time or opt for a smaller investment. “

Hiranandani also indicated that self-builders tend to offer softer prices in the months Next to attract buyers and existing value-free.

Chanakya Chakravarti, joint managing director, Cushman & Wakefield India, a real estate consulting firm, however, said it would be no impact on the short term because the fundamentals are strong.

“estate India has emerged as a viable asset class alternative that is less volatile compared to equity markets and other investment vehicles, making it a viable proposal for most investors looking to expand their share of risk in investment portfolios, “he said.

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Source: Sulekha.com

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