Is the Property Market Safe? Concerns Arise After Gold Price Plunge
The recent drop in gold prices has sent ripples of concern through the investment world, impacting jewelers and investors alike. Industry experts now fear a similar fate awaits the property market. The unexpected decline in gold prices has affected not only jewelers but also those who had invested in the precious metal. The rising prices had previously attracted numerous investors, with gold escalating from around Rs. 400 per gram in 2001 to Rs. 3000 per gram at the start of 2013 – a staggering 1500% increase in just 12 years. Yet, within a single week, this value plummeted by approximately Rs. 1000 per gram.
Similar to the gold market’s trajectory, property prices have witnessed substantial increases across both urban and rural areas. With the drop in gold prices, there's growing apprehension about a comparable downturn in the real estate sector.
While the property market dismisses the possibility of a price correction, it remains a concern that can't be ignored.
Experts Weigh In: Will Property Prices Fall?
Real estate experts maintain that a decline in property prices is unlikely. They argue that factors like dwindling land availability and population growth will sustain prices.
Experts emphasize that the scarcity of land in cities will act as a price support, arguing that as long as demand surpasses supply, prices will remain stable.
The Reality of Unsold Inventory
Despite expert assurances, the current reality suggests a different narrative. A recent report revealed a considerable surplus of approximately 1.4 lakh unsold properties in Delhi NCR alone. This oversupply is mirrored in Mumbai and other major cities, with developers actively trying to reduce debt by divesting assets. Contrary to public statements, many developers are offering discounts and incentives to attract buyers for their unsold inventories.
Whether or not a definitive drop is on the horizon, buyers currently benefit from these incentives, securing homes at comparatively lower prices. Builders downplay these perks as festival offers; however, their impact on the market is undeniable.