| Font Size |
However, such a fall could trigger significant negative effects on the economy with construction, consumption and investment taking a hit, a Goldman Sachs Economic Research report said.
Related industries such as steel and cement on the backend, and hotels, trade and transport on the front-end will be impacted, it said.
Income growth will fall, reducing demand for housing as the economy continues to slow due to the knock-on effects of the global financial crisis, lowering demand for real estate.
Besides income growth, demographics, interest rates, inflation and expectations of future projects affect demand. Commercial real estate demand will also take a beating due to the slowdown in IT and business process outsourcing sectors, it said.
A fall in collateral will hurt firms' balance sheets, increase funding costs, hurt confidence and reduce investment demand, it added.
However, India's favourable demographics, low mortgage penetration, falling interest rates and ongoing infrastructure demand will keep the property downturn from being protracted, it said.
Discuss this story on expressindia forums
|
|
It is high time, property prices are adjusted to its true value. The prices were hyped by the realtors and it is high time, prices are brought to its original levels. Otherwise, properties will be only in the rich man's hands or with the financiers.
hey ram, where are u>, are u not dreaming., do u think the current price is in it;s original level., you plese get up and come to this real world. the real price is 40% of th current price., dont fool the general public., and we know your true colour