Is there any chance that the Real estate prices may come down in some time?

Question

Is there any chance that the Real estate prices may come down in some time?

Answer 1

Yes they will come down in 150 years when human beings would take over moon  and mars for there new planetry civilisation.

Answer 2

nope they could go up or down jst wait an' see

Answer 3

No chance. In exceptional rare circumstances, in places where there is an increase of terrorist or anti-social activity or a sudden development of problems like earthquake, floods, shift of existing facility or closure of business establishments or industries etc, cost may fall down.

Answer 4

Wait for three to four months and you will see prices of real estate tumbling down.

Answer 5

Real estate prices are driven by the supply and demand factors besides the ability of the consumer to finance the deals thru internal savings or credit,where there is an interest cost for servcing the credit.Most often people negelct the time value of money and interest spread while servicing the debt.

Now,the demand for real estate is generated by two sections in the economy.The demand for commercial property(offices,hospitals,malls etc) and residential property.

Commercial property usually requires huge finances and is often financed by lending institutions, Government, international bodies to the real estate and property developers.The risk of speculation and lending thus vests with the financing insitutions rather then the property developer.When businesses find that the costs of operation are high ,they will either seek their own property or move out in search of less expensive locations. When there are upward surges in inflation and the cities can no longer sustain growth in infrastructure, the commercial property will see a fall in prices.By this time the real estate & property developer would have made his bucks and the financers suffer.

Residential property prices are again driven by the finances of the buyer ( internal savings + borrowings)besides supply and demand factors.Here again the objective of investments in land are twofold,category one are those buyers who desire to own a place and live in and the second are people who speculate on land prices with an intention to make fast bucks at the expense of another desperate buyer.The third most important factor is debt, when a buyer realizes that most of his earnings are actually used for financing the debt( tenures like 10 yrs,15 yrs,20 yrs)and as he/she ages, the ability to earn also comes down,they become cautious,when infalation occurs and business suffer due to bad operating cycles or attains stagnation levels the credit is squezzed forcing a drop in real estate prices.Some parts of India, is now witnessing huge surges because of the availibility of credit and the growing employment markets.Once the buyers realizes the fears of a debt trap and the unpredictability of the future earnings,family encumbrances,raising costs of living and the absence of a financial support post retirement. They tend to become cautious.Speculation deals will slowly lead to a fall in the prices.When a consumer begins questioning whether he/she is geting the moneys worth with the right type of living conditions and infrastucture, the prices will again be subjected to an audit.

Answer 6

everything is growing and moving upwards....and real estate prices is one of the main variable in increasing prices of other goods and commodities

well i think umesh you are right on some basis.but as an economics graduate,i would like to tell you one thing that, price of any commodity is not determined by just one variable , but also other variables like.. demand,supply,use of that land for,etc.etc.

hope you got what im trying to say.

Answer 7

yes sure ,it can be.

Answer 8

It's not likely that real estate pricing will drop, as property gains value.  

There is the possibility that interest rates might come down, in turn lowering payments for mortgages.

Answer 9

If what Umesh has said is true then its unlikely that they will come down. Especially now in mumbai with all that Mills land being available.

Answer 10

Location?

Answer 11

no way man. With IT industry people pockets being full and banks giving lots of loans no chance.

Answer 12

no way, real estate prices is like sensex of bombay stock exchange going up and up. not any chance to come down.

Answer 13

i dont think that they would come down now,but they may come down later.

Answer 14

Hi, There is a simple theory that as long as the stock marlets are in the bull run , the Real estate prices will also rmain in the bullish mode, it is only after the bearish trend comes in stock markets that there is a possibility of real estate prices coming down , this statement was made by a well known Indian stock market research analyst on CNBC India channel  (www.moneycontrol.com, www.rajatkbose.com), cheers,

Umesh