We know over the past two years or so, sales in the real estate industry were down and inventories started piling up. Though it was slowing demand for builders, yet homebuyers expected slumps in house prices. Strangely, their expectations reversed. Yes, both demand and supply are manipulated to keep the prices high. Furthermore, India’s realty market caters the investors and not the end-users.

Why are home prices increasing rapidly? This is because the supply does not match up with the increasing movement of people for employment or business in a growing economy. A recent study reports that the estimated shortage of homes is 20-25 million. This shortage has been existing in India for quite some time. It eventually resulted in unaffordable prices even for upper-middle-class to buy houses. So, buyers had disinterest so that demand for properties at current prices slowly muted. This situation should actually drop the prices in the market but that’s not happening. Why because the vested interests ensure that the delivery of homes lags behind the demand so that even at lower demand, prices of houses do not fall much as expected.

In the meantime, the Government regulations inappropriately restrict the supply of homes by limiting the cost and land availability by “changing or not changing rules” regulating Floor surface index (FSI), construction in coastal areas, the age for the redevelopment of stale buildings, competitive bidding for the narrow quantity of lands and allowing or disallowing payment for lands in instalments.

It paves chances by allowing payments in parts rather than full payment at a time increases the bidders and hikes the bidding prices of the limited quantity of land. Particularly, we may see the key raw material for building construction often accounts for as high as 60% of the apartment cost in metro cities.

Property prices though declined for the past two years in Chennai, 10% rental surge is seen. Chennai ranks the 6^th place in terms of affordability as per the data. People with over Rs. 20 lakhs income are only giving a buying shot because it is only possible for them. If you consider the nation’s financial capital and the home of Bollywood “Mumbai”, it is the most expensive city to buy or rent a property. An incredible history etched by the city of increased property prices by 46.9% and rental prices by 13.07% in the past three years. This upsurge is seen as the highest among other Indian cities. Despite the soaring prices, big shots rush to buy houses. The study conducted by India Mortgage Guarantee Corporation (IMGC) allied with Kantar IMRB showed around 38% of respondents informed that the interest rates were extremely high while an equal number of respondents cited are of lack of savings and unwilling to lend as constraints to own a house.

In a nutshell, buying a house involves loan repayment, EMIs, Property taxes, regular maintenance and repair costs. However, home is an asset that offers unmatched returns in the long run. Of course, owning a house brings a huge responsibility but while thinking the downsides, house ownership will be a worthwhile investment. The flagship builders like GP Homes, who has been successfully doing the business in all times of the real estate market. It’s the time to wear off your worries and join them for having houses even at hard times.