The Demand Factors
The recent housing boom was riding on the back of four broad factors -- rising incomes, job security, low property prices and interest rates, and tax benefits associated with buying a house.
While tax benefits remain, the other major drivers of demand have lost steam. Naturally, offtake at current prices has suffered.
The inherent desire to own a home remains, but people will do something about it only at lower prices. Take the example of the 5,000 or so living units that were offered for sale by the Delhi Development Authority in August at a discount of about 40 per cent to the then prevailing market prices.
It got about 800,000 applications, even though Rs 1.50 lakh (Rs 150,000) had to be submitted as the initial margin money. Even today, realty portal www.99acres.com gets around 10,000 enquiries every day.
Image: A high-rise building is lit up during construction in Mumbai. | Photograph: REUTERS/Arko Datta
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