‘Investors’ are realty’s mafia; that’s why prices can’t come down

The real estate market in India is an ideal example of the subversion of demand-supply economics. Everyone knows the real demand for both residential and commercial real estate is currently low. Inventories are piling up with builders and not even half of new launches are being sold in major cities. But prices still remain stubbornly high. According to the makaan.com property index, prices have nationally dropped by around 1 percent last month, with cities like Mumbai, Ahmedabad, Bangalore and Hyderabad seeing bigger falls. But one needs to follow the trend for a longer period to figure out if there is going to be any meaningful price correction where demand materialises. In all probability, it won’t happen.

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