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- Originally Posted by professornirReal Estate Property rates in Jaipur are are soon going to crash flat within a few years: An Economists perception
Now a days, everywhere there is talk of investing in property hike in Jaipur & resultant gain but real estate rates in Jaipur are not sustainable for the following reasons:
1. The population growth of Jaipur has tapered unlike other big cities & the marginal growth is due to lower salaried & lower income group people
2. Jaipur is neither home to any new industries or new private sector high end jobs like NOIDA or Gurgaon.
3. Govt. has put many regulations in place where each high end more than 10 lakh transaction of property will come under Income Tax scanner.
4. Other cities of Rajasthan such as Ajmer, Jodhpur, Udaipur etc. are developing fast and working as anti force.
5. There is no sustainable private sector in Jaipur that is giving good salary jobs, people with govt. jobs already have own houses.
6. The construction of flats in Jaipur is of so poor quality in majority of flats that within a few years they lose their resale value. So buying flat is a trap of the money.
7. Land prices are completely artificial based on black money economy and once the black money economy starts to burst, the land rates will come down drastically as what happened in many developed countries.
Those thinking of investing their hard earned money in Jaipur property should very cautious. Sooner or later the bubble will burst.
Partially agree with you but not completely (please correct me if I am wrong)-
It is true that property prices are unreasonable in Jaipur but I doubt that it is doing to "crash". It might remain stable resulting in loss of opportunity costs but crash is doubtful. Do you see the "crash" in other major cities in India. If builders are faced with cash crunch, they will not dispose off the property at lower prices to improve the liquidity. Instead of that, they will delay the investment on other on-going projects resulting in crunch for buyers. Builders can afford to delay everything for a long time unlike buyers who have rental costs together with monthly loan payments. Even in the case of low demand, I dont think the price will "crash" (as in its literal meaning).
About the "development" of Ajmer, Jodhpur and Udaipur- yes the prices of property in other cities have increased (in terms of % increase) in comparison to Jaipur but that increase is also without any proper reasons. Take the case of Ajmer- infrastructure is pathetic, civil authorities are hopeless, there are no facilites (education, medical, jobs etc) but still there are price hikes. I feel property sector is driven by "sentiments" rather than "logics". IMO- this will remain for the next couple of decades though there will be a chunk of people (like you and me) who will think from logical perspective before putting their hard earned money in real estate.
About other points- 100% agree with you.CommentQuote0Flag