Can cheaper homes be the answer to the Indian realty problems?

The real estate sector in the country has seen better days to say the least. Many of the major realty hubs across are in a state of disarray. There has hardly been any movement real estate wise in the major cities. The stagnation of properties is not a good piece of news for the economy as well as the realty sector does contribute to the growth of the Indian economy. Homes are no longer affordable. This is the biggest problem that the business. The prices are not reflecting the reality of the country’s economic situation. The common man does not have the kind of money that the realtors are demanding for their projects. Not everyone has pockets which are deep. The normal salaried class does not want to be bogged down by home loans which would take a life time to repay. The simple answer to this problem would be a price correction. It would benefit both the builders and the buyers. It would help rejuvenate the sector. There is a lot of inventory which has not been sold for obvious reasons. The biggest concentration of unsold inventory is in Delhi National Capital Region, Mumbai Metropolitan Region and Bangalore. There has been a big build-up of unsold inventory is these cities over the last few years. rnBangalore has the third largest amount of unsold inventory in the country. The realty traction here comes to a standstill. This is not the fault of the city but only a reflection of what’s happening as a whole to the country. An accommodation in Bangalore used to be sold at a good price due to demand. Now properties such as flats, villas and retirement homes in Bangalore are not selling at the same rate that they used to sell before. Besides the general slowdown that the realty sector is seeing, another huge factor has also had on impact on the sales of retirement homes in Bangalore and most other parts of the country. The government of India in a bid to fight against corruption launched the demonetization drive. Overnight two high denomination notes became invalid legal tender. The government also but restrictions on how much of this demonetized currency could be exchanged. There were also restrictions placed on the amount of money that could be withdrawn from ATMs. So many were not interested in buying homes under those circumstances. This made the numbers which were going down hit near rock bottom. But the good news is that once you hit rock bottom the only way is up. Finding an accommodation in Bangalore is not difficult. But buying it is. Prices have to come down drastically for the realty sector to go in for a reboot. That can only take place when a price correction happens. The government is doing what it can to ensure that the low and mid income groups also have the opportunity to own homes. It has granted the affordable homes segment infrastructure status. All in all realty recovery seems to depend on pricing.