Real Estate Growth Slows Down After Boom

Property is a lifetime investment. When a person makes decision to buy a house, he/she thinks for the market price of that locality and the existing rate trend. If we talk about the scenario these days, sales of real estate have crashed but prices have not come down considerably. Further downside is projected which will be healthy for the sector.

If prices rise, they must come down. It happened in equity and now it is real estate. After giving huge returns for more than two or three years the market has entered a slowdown period.

The slowdown today is result of prices having risen too fast and low interest rates further boosting demand. However, not only have home prices peaked, interest rates have also soared. This has weakened sentiment and buyers have turned more careful. Property is a long-term investment and you can expect 25 – 35% IR returns.

One reason why real estate sector has not crashed is because on an average, the sector has grown twice the GDP growth rate. So, if the economy continues to grow at 9%, real estate will grow at 15- 20%.High interest rates have been another bane. Homeowners who took floating loans have been hit the hardest