Thursday, March 12, 2009

About Indian economy and crash of Pune real estate market

Here are few links to new articles discussing Indian economy in 2009:

1) What's Wrong with 6% GDP Growth for India? - By Swaminathan S Anklesaria Aiyar

2) RBI’s growth target to be missed

3) Indian economy hard hit by global slowdown

4) Shankar Acharya: A cloudy outlook

5) World Bank says global economy will shrink in 2009 - By Samantha Bomkamp

Will Indian real estate market go down as low as US housing market?

My readers in US, who are witness to US housing market, always tell me that we, in India, have no idea how bad real estate market would be. I completely agree with them, yes, we don't have any idea.

If you read above articles, you will find that all of them agree on one point. Recession would be too bad. But Indian economy would be doing better than other economies. Bad Indian economy may not be as bad as we expect.

Is this planed positive dose or just plain rejection of reality? What is your take on Indian economy in recession. How bad it would be? As bad as US economy? Would real estate market will crash and may take more than 5 years to recover? Please, share your views in the comments.

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  1. Yes, there will be a crash in realty sector but situation in India will NOT be as bad as US.
    1. Crash in US property prices were due to sub-prime issue and we won't see this in India. As Govt has control over banks.
    2. Propertly prices will settle down around mid of this year. Once people will start affording they will start buying.
    3. Many people are waiting for this correction & affordable houses. So once people start getting the rates they can afford their will be huge rush & may be we can see a rally there.
    4. Last but not least - most of the things will depend on US Economy - how quickly it can bounce back.

  2. I am curious: Who are the buyers of these 50lacs flat in India/Pune ?

    US Economy: is in downward spiral for long term. You may see some bear rally and that's it.

    Whats the houselhold income in Pune and whats the avg price of a decent flat in Pune ?

    Any thing out of normal would return back to normal. The question is not if but it is: when .
    It is a matter of time only when real estate in India would see widespread downfall in prices.