Real Estate Bubble In India

India has been witnessing a Real Estate boom in last few years. Primarily powered by the growth in information technology industry, the boom had taken property rates to the sky. Politician-Builder-Banker lobbies have been The Primary beneficiaries of the boom.

The global economic slowdown and higher interest rates seem to have busted this real estate bubble. Property rates have started declining. Though they are still higher than reasonable, it is expected that the rates will come down heavily in coming months, ie, by the end of 2008. October used to be the month with highest number of bookings in the residential property business, due to Dussera and Diwali. Contrary to builders' expectations, the bookings have been very few in the first half of October, which indicates the heavy reduction in demand. Buyers have become more rational in the valuation of real estate property and are no more ready to pay the exorbitant amounts demanded by builders.