Housing Prices Fall in April-June 2013 Due to Poor Demand

Economic slowdown and slow movement on policy decision front in India saw 1.7% fall in housing prices during April-June 2013; as reported by Sahara Samay. Though housing prices fell by 0.1% in the January-June 2013 period, but it was by 5.9% for a 12 month period ending June; according to Knight Frank House Price Index, which tracks the mainstream residential prices in 53 countries. (http://www.saharasamay.com/lifestyle/real-estate/676544690/india-housing-prices-fall-1-7-pc-april-june-poor-demand.html)

Though fall in the prices may be attributed to different factors prevailing in the economy, but important out of them are as follows:

1) Increase in unemployment rate in India; 2% in rural areas and 3% in urban areas (http://articles.timesofindia.indiatimes.com/2013-06-23/india/40146190_1_urban-india-urban-women-rural-women

2) Lower GDP growth rate

3) Major economic policy decisions pending for decision making

4) Less disposable income in the hands of buyers due to high inflation rate ( Retail Price Index has remained in 10% range for a long time)

But out of all these points, one points is very crucial that housing prices has remained firm has seen an increase of 5.9% for 12 month period ending this June. It means that cost and demand-supply ratio is not supporting the expectation of any dramatic price fall.  

 

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