Real estate sector in north India seems to be heading for a price correction. Supply of residential units with a valuation of Rs 25 lakh and above, constructed during 2004-06, has exceeded demand in the National Capital Region, Ludhiana, Chandigarh, Panipat, Sonepat and Jaipur, according to a study conducted by AC Nielsen.

According to the study, the northern region had a surplus of 16,764 units. There was an estimated demand for 21,262 units, while there was supply of 38,026 units at the surveyed locations.

The excess supply is probably due to realty firms creating a hype around locations like Ludhiana, Panipat and Sonepat. There is steady oversupply in the north, with speculation being as high as 40-60 per cent in some markets. A price correction of approximately 15-20 per cent is expected shortly. It is expected that Gurgaon will witness the maximum correction.

Source: Business-standard.com
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  • R U Ready To Sell

    v R READING THSE STROIES SINCE LAST 3 YEARS? hAVE U SOMETHING TO SELL?iF YES ,R U READY TO SELL?
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  • landsmiths..word

    There is no correction expected in Punjab region certainlly this is gonna go ahead with great development and huge FDI flowing in....this is wrong/...:(
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  • Price Correction - Inevitable

    A PRICE CORRECTION IS INEVITABLE, ESPECIALLY AFTER THE Real Estate Management (Regulation & Control) Bill IS PASSED IN THE BUDGET SESSION OF THE PARLIAMENT.

    THE BUILDERS WILL NOT BE ABLE TO SELL PROPERTIES ON SUPER AREA AND BY LAW WILL HAVE TO SELL ON CARPET AREA.

    A NUMBER OF OTHER BUYER BIASED PROVISIONS ARE ALSO EXPECTED.
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  • Real Estate Prices May See Corrections

    The credit rating agency ICRA believes that the real estate prices might see correction in some pockets. These pockets are cities which do not enough economic activity to support the price boom there. Vikas Agarwal, general manager, head-real estate & construction, ICRA Ltd, said, “There might be some dipping in the real estate prices in some pockets with low economic activity, low income level needed to support the price.”

    The property prices in an area must be supported by the underlying growth story and towns without fundamentals will experience some correction, he added. Recently, property prices in Bangalore and National Capital Region (NCR) have seen a bit of correction. He pointed out that in the short run the high interest rate may create small hiccups but in the long term there is a strong demand for real estate & their prices are going to stabilise. He also cautioned against the mushrooming growth of small players, having low credibility, in the real estate business on the back of huge growth in last 3 years.

    John Kriz, team managing director, Real Estate Finance, Moody’s Investor Service, said that globally there is a movement towards public real estate and by creating real estate investment trusts (REITs) the public property space can be strengthened. In India, the government is yet to conceptualise REITs.

    REITs are commercial vehicles which own property and issues shares to its members. Kriz also highlighted the factors while designing REITs. These are limits on leverage, management of property owned by REITs etc.
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