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Speculative buying in real estate declines

Speculative buying in real estate declines
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First Published: Sun, Sep 14 2008. 02 27 PM IST
Updated: Sun, Sep 14 2008. 02 27 PM IST
PTI
Mumbai: Speculative buying in the real estate market in leading cities has declined to 5% from 30-40% earlier and genuine end-users account for nearly 80% of total property sale, a report on real estate by Ernst & Young and Ficci has said.
The report said: “The last three to four quarters have witnessed a significant shift in the buyers’ profile with real estate prices reaching a level where speculators \ investors cannot realise significant returns.”
Speculators used to account for 30 to 40% of total sales earlier, according to the report released at a real estate summit.
The report has divided non-genuine buyers between speculators and long term investors.
The report defines a speculator as one who would sell the real estate property within 18 months after purchase, while long term investors tend to sell their property after three to five years.
While the speculative buying at present is estimated to account for five per cent of total sales, the buying by long term investors, who have been found to be active in premium segment, currently account for about 15% of the sales.
The report said developers in leading cities believe that genuine end-users have taken over from the investors and account for nearly 80% of sales in their current projects.
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First Published: Sun, Sep 14 2008. 02 27 PM IST