Those anticipating any slump in the property prices might be disappointed as the property values are likely to show an upward movement in the post coronavirus world based on several deciding factors.
A clash and controversy between the observations and opinions are also divided owing to the volatile feature of the Indian residential market which has been thrown out by the sudden COVID rampage. A section of negative minded and conservative people holding that if the demand slowdown has been keeping price growth in India’s residential real estate market in check, the sudden COVID outrage, threatens to drastically impact the global economy growth. The nations extended country-wide lockdown to contain the spread, would wipe off any chances of value appreciation in the property market.
If we take a quick survey on property prices in India’s nine major residential markets then it would certainly bring out the fact that property market is maintaining stability in price graph.
Property prices in India’s nine prime residential markets
City Average rate PSF as on March 2020 Annual change
Ahmedabad Rs. 3,032 6%
Bengaluru Rs. 5,275 3%
Chennai Rs. 5,184 No change
Gurugram Rs. 4,893 -1%
Hyderabad Rs. 5,434 9%
Kolkata Rs. 4,134 3%
MMR Rs. 9,472 2%
Noida Rs. 3,922 1%
Pune Rs. 5,017 4%
Source: PropTiger DataLabs
Keeping in view the above stagnant and flat graphic trivia the Economic Survey 2019-2020 suggested that the promoters should allow the prices to drop, by taking a haircut as a remedy to reduce their inventory burden as the promoters should sell their inventories at whatever prices they get to resolve their liquidity issue. However, a number of issues are at play which makes accepting this proposition difficult.
A general presumption can be drawn on the increase of cost of supply of building and construction materials which will increase the bottom prices of the property. Reserve Bank of India’s (“RBI”) latest quarter policy suggests and implements a heavy cut in the REPO and Base Rate unburdening the Home Loan EMIs considerably. Therefore, such a relief measure of the RBI would make the Indian Real Estate Market more buyers’ driven. Last but not the least, the industry has already been reeling under a slowdown for the past eight years and as such there is very limited scope to cut the prices.
The first consumer protection legislation Consumer Protection Act, 1986 (‘old act’) was introduced with the primary objective of protecting consumer rights. However, with the advent