India’s real estate sector or industry is steadily booming over the recent decades, where the rural people are moving to the urban area in search of work employment and a better life. This trend has had a favorable effect on the economy of the nation in this case. Cities like Delhi NCR, Bangalore, Chennai, Kolkata, and Mumbai are examples of increasing urbanization in terms of development and investment opportunities in real estate properties. The point of concern is that on the contrary to all other expansive potential high growth sectors of the economy, the real estate sector, in particular, stormed to the very first as the most lucrative business commodity. Its very fast emergence and expansion over a very short period has indeed brought about various challenges. The government had to intervene and regulate the real estate sector on a number of occasions due to its sensitive nature that affects the average citizen of the country.
Broader Background to Property Policies
Long before the establishment and enactment of the Real Estate (Regulation and Development) Act, the Reserve Bank of India had started observing an upward trend in the price of housing which involved high amounts of loans and their corresponding rate of interest. It has since been routine for the RBI to measure the rate of growth of prices and to provide a graphical mean which is called the Housing Price Index.
The Housing Price Index Explained in Detail
Broadly defined as a representation of price movements of the houses in all states of India, the Housing Price Index is a quarterly publication of the Reserve Bank of India which started conducting surveys of some major urban centers from the country. The indices are estimated using official statistics of real estate prices that have been reported to the registration offices of the Governments of different States.
After looking closely at the changes that have taken place in housing prices over the last few years, it is clear that urbanization and therefore, the need for housing in cities has had an effect on prices. Looking at the data of specific quarters can help explain whether the present time is ideal to invest in real estate. Data from the Reserve Bank of India shows that the all India House Price Index increased by 5.1 percent during April and June of 2023-24 as compared to a 3.4 percent increase recorded the previous year. RBI publishes such quarter data for its various regions based on records of real estate transactions maintained in the major cities of the country, such as NCR Delhi with the highest growth as well.
The Effect of Interest Rate on Housing Prices
One crucial observation here is that, the rates of house prices are clearly on an uptrend trajectory in the urban centers of our country notwithstanding the increase in interest by the Reserve Bank of India in order to combat rampant inflation. This shows that the sustained growth in prices, as dictated by the high housing loan rates in metro cities, is an obstacle. This means that the economy of the nation is advancing and people are careful when it comes to their life, education and living conditions.
Gurugram as an Instance of Urban Expansion:
Gurgaon is undoubtedly the topmost city with a normal demand for housing and a flourishing population. Don’t forget that Gurugram’s inhabitants have increased by approximately 2 lakh people each year over the past few decades. Because of this continued growth in the population, there was an increase in the demand for houses, resulting in high home loans and interest rates which subsequently sparked economic activities. This is why Gurugram ranks among only a handful of top cities in the world with large real estate and economic activities, business and industrial wise.
Buying a Piece of Real Estate in Gurugram:
Such figures are quite astounding for a potential buyer of land, and for a good reason. It can be said that making an investment in Gurugram real estate properties would be wise as the residential and commercial sectors offer premium returns. A little bit of caution needs to be taken with regards to the people behind real estate promoters and their projects. A well-designed project from a good developer should leave you content about your investments. Signature global is a reputable real estate promoter with excellent projects that are well adored.
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