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  • With India’s GDP growth property prices have gone up

With India’s GDP growth property prices have gone up

The increase in GDP of India results in increased property prices

Effect of India's GDP growth on real estate sectorThe gross domestic product (GDP) or the economic growth of India has been witnessing a progressive advance in the last 10 years and has resulted in an increase of the amount of goods and services produced by the economy. The GDP growth rate which was measured in percentage after adjusting the inflation aspects has shown an increase when compared to the previous year.

What is GDP?

The Gross domestic product (GDP) is the market value of all the final goods and services produced by a country in a given period. The GDP indicates a country’s standard of living and is not a measure of personal income.

How is the GDP of a country determined?

Determining GDP of IndiaThe GDP of a country is determined in three ways which gives the same result;

  1. The product approach
  2. The income approach
  3. The expenditure approach

The most used GDP approach is the product approach which totals up all the outputs of every class of enterprise in order to get the actual total. Similarly, the expenditure method is based on the concept that all the products must be sought by somebody and the value of the total product should be equal to the consumer’s total expenditure while buying goods.

The income approach of calculating the GDP is based on a factor that the incomes of the productive factors should be equal to the value of their product by determining the GDP based on the sum of the producer’s income.

How is GDP useful?

Every country records its productivity levels through a GDP. The increased productivity shows the increase in goods and services which are produced with the same capital, materials, labour and energy. The GDP is balanced with a growth in the population, based through mapping and the common man’s standard of living.

GDP of India on house prices

The GDP growth lead to growth in the per capita income and increase in demand for housing. Following are some points to be considered before an investment.

Real estate trend for right time to invest in a property

  • According to various surveys, the gdp per capita income of the country has increased significantly in the urban areas. This in turn has led to an increased demand for the properties which further has increased the property prices in the market.
  • The instant rise in the average house prices which happened few years ago was due to a gap between the demand and supply. The projects were delayed as the completion of a project takes 2-4 years and it takes time for the supply to be delivered according to the demand.
  • The property prices were increased due to the speculation and the investment-led demands. Also there were corrections made in the property market due to the reduction in the speculation and the investment-led demand.
  • It is believed that the GDP growth has a direct relation with the property market along with various other factors which result in the appreciation of the property prices.

What can a property buyer do in such case?

There are many options available in the property market for the buyer like; few of the developers and builders have land which is banked for many years. Similarly, there are properties which are offered in the second sale market. Thirdly, there are many projects which are launched under the banner of affordable or the budget homes. Henceforth, the buyer has all these options while buying a home.

A home buyer should also consider the right time before investing in any property along with factors like the location of the property, size of the property, the value of the property and so on. Considering the above points will help the buyer in a great deal.

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Tags : demand for housing GDP effect on real estate GDP growth GDP growth rate GDP of India growth of Indian economy India's GDP growth property price real estate in india Real estate trend

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