The Time has come when Real Estate Industry should analyze whether are they making requirerd nos of Housing units or much more than demanded ? Previously the demand of property was more for the investment purpose but now Developers & Investors both are looking for the End User to come forward to keep this Property ship afloat and rescue this drowning Industry which now values third after Petroleum & IT & much more than any other industry in India. Drowning may not sound the right word to many of us but our desperate developers are determined to prove me right sooner or later.
Actually Indian Real Estate Titanic will drown soon if we will not stop putting more weight of new stock on already over supplied market. At the time when our once trusted Investors(Sailors) wishes to exit from the Market(Ship) and move their funds to Stocks & Bullion, we must not put their Investment on stake by introducing new inventory in to the already sluggish Market. Perhaps last 10 years of Indian Economy has seen major thrust in Real Estate over Gold & Stock. If this investor will get an easy exit with respectable return, he would come back soon. As we have always seen that every three years India Stock Market crumbles & revives.
Like all other Businesses , some basic business principles are implied on Property Business too. Now, this is the time when Market leaders should go back to Junior school to learn basic Business rules. Though I am not a Business graduate but I have been taught in school that whenever will there be the rise in Supply, Prices will go down. Forget about school , learn from black marketers of Cinema tickets who out stocks the tickets & then sells them on premium. For long term gain, I strongly recommend Developers to buy back few of their units to support market sentiments & keep the investor's faith up. And for God's sake do not introduce new phases in the Housing Projects which are nearing possesion. Even the enhanced FAR of most of the Housing Projects of Noida & Greater Noida has become a major source of new stock of Property. This may sound lucrative for the developer but is injurious to the health of investor and ultimately, will be proved to be the slow poison for a most prosperous Golden Decade of Indian Real Estate.On the other hand, little more faith in existing investors can improve the market sentiment which in turn will see the surge in Demand from the End Users, Who are fearing a Real Estate bubble burst & are skeptical of investing in properties .
Real Estate industry can control the property recession by limiting the supply but for that, they have to come together under the aegis of common umbrella like CREDAI. Who should assess the right no of properties to be developed for any particular area and accordingly should control haphazard development. Clear the backlog for New Home buyers by strictly enforcing the timely delivery of Flats & Apartments in various Housing Projects coming up in Delhi NCR, Hyderabad, Banglore , Pune etc.