Investment boom in the Real Estate Sector: Before Demonentisation

“Roti, Kapda aur Makaan” used to be the bare necessities for a family in India. People who could manage all of three were considered as well to do. In modern times the necessities have expanded manifolds and people are working round the clock to fulfill them. However, the third of the three basic necessities has still eluded many. Nowadays, owning a house where one works has become a dream.

The rise in the price of real estate in Indian metro cities in the last decade has been extraordinary. There was more than 300% increase in real estate prices in prominent urban cities in India than about 100% increase as an average on a global scale. The steep rise in the real estate in India can be linked to the software boom in India in the early 2000s. The actual demand coupled with the anticipation of high ROI due to the estimation of huge demand in future fueled the prices.

At the same time, the real estate market in India has been very dubious and opaque. Contrary to follow the price elasticity of demand, the price of flats continued to rise in spite of huge inventory overhang.