The Indian real estate market, in particular in Bengaluru, is in the grip of a slowdown. However, it is not a bubble that waits to burst, as some fear, according to a recent post on Reddit.
The concerns concerning a real estate accident are largely unfounded, because the market dynamics do not have the characteristics of a speculative bubble, the position indicates.
Understand the “bubble”
A real estate bubble generally involves uncontrolled loans, inflated property value and sudden collapse when borrowers do not reimburse their loans. This was the case during the American subprime crisis, where excessive loans led to an increase in artificial prices that finally crushed the market. However, the current slowdown in India does not come from reckless loan practices or from a generalized financial crisis among banks and developers.
The current slowdown in the Indian real estate sector can be awarded to various factors, including the evolving labor market and the progress of artificial intelligence (AI). “The slowdown is probably due to factors such as AI progress and the instability of the labor market,” noted the Reddit user. Economic uncertainties, the increase in interest rates and a change in the feeling of buyers could also contribute to the reduction in the rate of growth.
Minor correction vs market bust
Although a certain market correction can be expected, it is unlikely that it will lead to a drastic collapse. “In the worst case, we could see a minor correction with prices increasingly increasing in the coming years, but that will not lead to a bust on the market,” said the post. Unlike the American housing crisis, the Indian market has not been highly exploited and banks have maintained prudent loan practices.
However, the position warns in custody. A possible exception to the prospects, according to the Redditor, would be the financial fall of the main real estate developers. “The only exception would be if 1-2 major real estate players become bankrupt,” said the position. However, many developers, such as prestige, continue to undertake large -scale projects without significant financial distress.
Therefore, while the Indian real estate sector is slowing down, it is far from being in a bubble that is about to burst. “More serious disruptions would be necessary to have a major impact on the real estate market,” concluded the Reddit Post. For the moment, the market remains stable, with only a progressive correction expected in the near future.
The message sparked a discussion on Reddit with certain users even saying that they did not see any slowdown. “I do not even see the slowdown around me. The brokers still cite exorbitant prices,” said a user.
Another user shared: “The service sector represents more than 50% GDP, even a few% could affect Bangalore real estate markets. Correction of the labor market will result in bubbles.”
A user has shared that the Indian Reale State will never “crash” because the inflationary pressures do not affect the rich in the same way that they make poor people and the middle class “.” In fact, he will have an opposite effect where the wealthy will use it as a channel to channel all their black money and will buy as many land and properties as possible for cheap prices … is that the rich will have a larger share of privileged real estate and will be closer to the establishment of a monopoly on this subject, “said the user.
