What Makes India's Real Estate So Expensive?

4) High Interest rate & construction cost:

In recent past, the Interest rates on home loans and the residential property prices have touched the sky resulting in unreasonable EMIs. With the high rate of inflation and more number of residential projects coming in, that question of residential property prices coming down seems to be unrealistic. Instead of going down, the property prices have gone up. Moreover, developers are coming up with luxury and ultra-luxury residential projects including independent houses, villas and villaments, leading to escalated property prices.

Another reason for hike in property prices is the construction cost which has increased due to hike in interest rates. Niranjan Hiranandani, MD of Hiranandani Group cited that “With the cost of raw material like cement, steel and other inputs going up by 25 percent, it is just not possible for developers to reduce the cost, unless the government offers some subsidy”, reports Economic Times.