Deep Impressions

Demand forecasting is a complex exercise and more so when it comes to Real Estate ; as homes are bought for consumption, for investment and at times for investment-cum-consumption. However, a broad-based analysis can definitely help chart out a trend.                          ----------- xx ------------ xx ------------- Demand forecasting in real estate has always been a puzzle for economists. Economics suggests consumption products like iPhone, cars, mobile data, have a falling demand curve which means as price falls their consumption increases. For investment products like equities, as prices fall, trading volumes normally come down indicating lowered demand. However, when it comes to real estate, demand forecasting becomes a complex exercise, some buy homes for consumption, some for investment and there are other who look at homes for investment-cum-consumption. Therefore, demand forecasting has always remained a puzzle. However, a broad-based analysis can definitely throw a good a

Real Estate : Revival without Reliefs Fiscal reliefs for real estate are a must but they can only provide short term survival.  Demand revival without impacting govt revenues is the key to the long term health.     --------------------------------------------------------------------------------------------------- Zooming through the various webinars on revival of real estate, one would have observed that the prominent suggestions were GST input credit, reduction in GST rates, reduction in municipal charges, limited period zero stamp duty etc for reviving real estate. There is no doubt that most of these are much needed measures should be implemented. However, there is a difference between survival of the supply side and revival of the demand side. The above measures will provide the much needed ventilator to developers but not a long term immunity. Time and again, it has been proven that the long term survival of the industry lies only in the vaccine

Debt, Debt, Debt……Everywhere !! The four letter word that everyone loathes today is DEBT. Whether it is retail borrowings, industrial credit or loan to developers, debt has occupied the top of the mind discussions as demonetisation had done in November 2016. It is commonly believed that the biggest concern comes from real estate sector. And while identifying the reasons for high indebtedness in real estate, oversupply, economic slowdown and developer’s greed are believed to be the key factors. Unfortunately they only happen to be the more obvious reasons. Oversupply and economic slowdown lead to mismatch between Demand and Supply - for which most developers have contingency plans. And as far as developer’s greed is concerned, when were developers not greedy ? So even these are insufficient explanations to the quantum of debt within the sector. What has actually caused this humongous debt in the structural shift in the core pillar of the real esta