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Fear Factor Affects Real Estate in Metros
At a time when the real estate sector is battling slowdown, terrorist attacks in Mumbai have cast a pall of gloom on the industry. Early market indications estimate that the sector could see an 8-10% dip in prices as buyers have totally deserted the market. In fact, in many metros such as Mumbai, Chennai, Kolkata and Ahemdabad as well as the NCR, there has been a total lull in the realty market. With this incident, the pressure is building up in the secondary sales market as well. The impact on the overall values of residential properties is certain and they are likely to see a correction in capital values in the next couple of months.
The worst terrorist attacks in the country have brought the industry, already faltering in a slowing economy, to a grinding halt. Says an industry insider: “The attacks may impact sentiment and consumer confidence in the near term. The market’s become completely quiet and the future doesn’t look bright either. The last six months were quiet, but now it could get worse. If the government action does not help bring confidence back for foreign investors, we could see an impact on demand for commercial real estate putting further pressure on rents.” In fact, this kind of incident will also hamper foreign investments in the sector. Experts say while the global scenario is dismal, NRIs and even second generation Indians will wait and watch before they invest in the country. The attacks, targeted specifically at foreigners, have made them more jittery.
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