Is speculative demand driving up housing prices in India's big cities?

Indian Realty markets have been always driven by speculative trading. The main reason behind this the presence of huge Black Money in the Indian economy. The major holders of Black Money are mostly Speculators, Politicians & Beuracrats. These people cannot keep the black money at home or idol. Hence, such black money is invested in real estate. If there is any unexpected surge in market, it could be due to sudden generation of black money.

The metros might have seen some surge in the realty market. The real indicators would come from non-metros Grade-III cities, where the markets are need driven.

I agree with you Anjali, presently,prices are actually fuction of supply of location,supply and job creation.An example to this would be:The same mid housing scheme is priced at Rs.4000/- per sft. in Gurgaon,where as it is available at Rs. 1700/- per sft.in Bhiwadi,with the same specs.

I dont agree with Archana.I am a Unitech employee.I had very little choice left for myself when I bought a flat in Nov. last year.Trust me,There are many customers to buy the same property from me at 25% premium since then.The wave is a wave.It is not so that the property brokers OR the Unitech/DLF employees,who are the only visionaries.There is a remarkable rise and it is expected to be so at least upto the onset of Common wealth games.What matters whether it is the end user or the broker....so long as the money keeps flowing in......  Nothing is hype....There is a rise....I hear people say once again:-"The property investment is the best investment."

And infact,I tell you one more truth.....The developers have earned more than before....
on A property sold in 2005 at Rs.1600/-per sft. the builder spent Rs.1400/- on its constructuion cost.It was only the market price which went up to as high as Rs.6500/- per Sft.Today,if a property is sold at Rs.4000/- per sft. The construction cost has merely changed (may be up to Rs.1600-Rs1700/-).But due to the reason that the common man finds that now things have come in his budget,the sale has been much better than the boom times in yesteryears.

Yes,the job market is ticking again.....All these are signs of good times ahead.....What say..