Property Rates: Very High, Better Wait for Now for Mumbai Pune Real Estate Investments

This refers to a recent report covered in the Zee Business News Channel. As per the reports, there are some 80,000 flats and apartments lying vacant for want of buyers as of now i.e. 2010. The same number, i.e. the no. of flats/ apartments to be sold in 2008 were at 50,000. So in summary, in the last 2 years, the no. of apartments waiting to be sold have increased by 60%. And interestingly, the builders, instead of lowering the prices, are actually sitting on quoting high prices.

The report was aired on in prime time. It is interesting to note that despite being densly populated, a city like Mumbai which is also called the economical capital of India and easily able to absorb the global recession period, and coming back with fat pay packages to service industry employees at all levels. With all these facts behind it, it worth noting that people are still finding it hard to buy properties, even for their own use - forget about the seond investment option.
What can be the reason for this??
As quoted, the prices are still too high in both Pune and Mumbai. The builders are just not willing to compromise on the prices. They prefer their built flat lying vacant, rather then being sold for a lesser amount.
No wonder why there are 80,000 apartments lying vacant.
The Real estate market in India in not regulated. That is why there is no price sensitivity. Builders quote anything which they want to and then there are these "smart alecs" who dont really understand money and pay whatever is demanded. However, all this happens in good times of so called "growth period". It's the slack times when things come to reality - when the jobs are at stake, when salaries decrease, instead of increasing, when Banks increasing the home loan rates, when stock markets tumble, and so on.

As most of the Banks have increased their BPLR or prime lending rates thereby increasing the EMI payments, experts mention that it is the era of high interest rates. The Chairman of one of the largest home loan provider banks also mentioned that this is the time for real estate rates to come down, else there will be no buyers.

So is it the right time to buy property or invest in real estate sector?
Nobody knows the answer to this question with certainity, but if you belive the various voices that are coming out in the market, it is the time for high interest rates. Inflation is hitting hard, prices are shooting up, banks are increasing their loan rates, the primary class of customers (IT workers) are getting hit by US outsourcing ban, high visa charges, low salaries and so on, yet builders are not willing to compromise on the high prices of flats and apartments, lakhs of flats are ready but unsold - all these indications tell us that there might be a correction in the real estate prices. However, things might also turn other way round if inflation eases out, salaries rise and so on, there might be the reverse effect