The below is an extract of an article which recently appeared in an Indian National newspaper and could be of interest to those building and renting in the Tiruvannamalai area. In previous years many investors have built homes in this place, with the idea of renting to either middle class Indian earners or visitors from overseas. However with recession prevalent in many Western countries and a resulting decline in the number of visitors to this country, it is perhaps important for the Tiruvannamalai property investor to remember that prices should reflect the purchasing/rental power of the buyer/renter.
Oversupply affects real estate
High price points and sticky borrowing costs have weakened buyer sentiment in the commercial and housing markets but realtors hope that since pent-up demand has increased over the three year slowdown in demand the first quarter of 2014 could see an upturn.
However for now there are about 11.09 million homes lying vacant in 2012-13 according to the Ministry of Housing and urban poverty alleviation. In the commercial space vacant premises range between 12-22 per cent in different cities, according to property analysts.
Specialists in real estate have noticed a decline during the third quarter in 2013, as corporations focused on consolidating and downsizing their real estate portfolios, and/or relocating to peripheral markets.
While this has contributed to rental stability in most markets in recent months, subdued demand and high vacancy levels led to a steep decline in office space supply during the last quarter, weighing on future investment plans.
Even investments in the real estate sector have slowed down across segments, resulting in stagnant construction activity.
