Souce: Financial Express, Reserve Bank of India

 

The real estate developers may be having difficulties in the country, but the prices of real estate continue to soar. As per The Reserve Bank of India (RBI), the house price index for nearly all metros was higher the 2nd quarter (Q2) as compared to the 1st quarter (Q1) of 2012. As shown in the chart, barring Chennai, the index was higher for each of the metros and for the country as a whole. One major reason for this increase in prices is speculation. Particularly in the higher price brackets.

The Union Budget 2013 has introduced some benefits for housing. Most of these benefits are limited for the first time owners in the small to middle priced housing categories. By introducing taxes on higher priced housing, the government hopes to reduce the speculation in real estate markets. But will these measures help to curb the increase in pricing? We hope so.