Demand forecasting in real estate has been a tough task to reveal for economists. Economics suggests consumption products like mobile data, iPhone, cars and also have dropped down the demand curve that defines a major price fall as the consumption increases.
In terms of investment products such as prices fall, trading volumes, equities come together with an indication of lowered demand. Moreover, when it comes to real estate, demand forecasting becomes a complicated practice and most of them end up buying homes for consumption, for investment, and others look at homes for investment and consumption both. However, a broad-based analysis is expected to reveal a good amount of light on the expected trend.
According to the market research report, the real estate market in India has been most impactful but most of the big cities have followed the Mumbai market. Since Mumbai remains the largest real estate market, it will continue to recognize the trends across India. Most of the local indicators in Mumbai have got a confirmation in the impending bottoming out of the Mumbai market.
Due to the covid-19 pandemic and regulations of lockdown by the government, it has been noticed that the lower-income for homebuyers has been reduced. Moreover, over the recent past, incomes have been increasing and real estate was at the peak along with interest rate. As a result, we have a situation where the EMI-to-income ratio has dropped down from 50 percent in 2014 to about 25 percent in 2020.
During the last three years, the level of debt in a developer’s balance sheet has forced them to liquidate inventory to make their commitments to the lenders. As a result, the consumer has experienced falling market prices. With more money flowing into the system, the pressure is metered down with lower stress levels and fewer discount deals.