Mumbai Societies are not insured
Very few buildings in the city are insured despite the huge threat to housing societies from both natural causes, such as flood, fire and earthquake, and legal ones, such as title issues and penal action from authorities. Almost 95 percent of housing societies are not insured. But the trend could reverse if the urban development ministry incorporates title insurance in the upcoming real estate management bill. Not only will it make ownership of built up and landed property far more credible and secure, but it will also lead to renewed confidence among subsequent chain of buyers. The issue of insurance assumes significance as title deeds of the land on which building are built are often opaque, and the home buyer owns only the flat, not the land on which it stands.
Realty boom unlikely
The real estate sector is expected to remain robust despite the global slowdown, but it will not witness the kind of price appreciation it has been in the past.. The mid income residential real estate seems a good investment option. For long term investors, the residential real estate sector is a lucrative proposition. But do not pool your money into projects in the early stages of completion, because this may suffer delays. The safest options are ready projects. Experts are thinking that the economic uncertainty may impact the Indian real estate market but it won’t be severe. The domestic economy is resilient and its fundamentals remain strong.
Many of the land developers are shifting their focus to smaller Indian cities where they plans to increase their land banks substantially to offset the sluggish demand for new homes in key metro cities. Demand has been steady in small cities and towns where people buy real estate mainly for their own use and not for investment. The demands in these areas are expected to remain strong.
Impact of economic situation of US and Europe
The global financial markets turmoil since Standard and Poor's downgraded US sovereign rating last week may have a medium term impact on India’s real estate sector, putting a freeze on fresh office rentals and property purchases as well as on foreign capital. India's property sector is already battling its own issues such as liquidity squeeze with banks restricting lending, high interest rates, slowing sales, high property prices and soaring debt. The impact of the economic situation in the US and Europe on India's realty market may resemble the panic during the first days of the Lehman Brothers Holdings Inc. bankruptcy that triggered the 2008-09 slowdown.
