Assessment of Speculation in Real Estate Sector in Pune City

Abstract

Abstract: The Real Estate Sector is an aggregate made up of the housing, industrial, office and retail sectors; wherein, housing sector play the most significant role. The Real Estate Sector has emerged as the most prominent investment option for the country’s urban households, taking priority over gold, fixed deposits and equities exchange trading. At any point in time, this sector may not be at demand-supply equilibrium because of frequent exogenous parameters and a number of uncertainties present. The investment in Real Estate Sector, particularly in housing properties is done with speculative intention. The speculative activities in the housing properties are the result of uncertainty about future price movements. These activities add pressure to housing demand and, through hoarding, reduce the number of housing units directly available to buyers, thereby pushing up the housing prices. Therefore, assessment of speculation in Real Estate Sector in general and housing sector in particular has become inevitable to achieve equilibrium in Real Estate Sector and stability in housing prices. In this research paper, assessment of speculation in Real Estate Sector in the city of Pune has been carried out using Indexing Method along-with analysis of RESIDEX Index, Vacancy Ratio, Saving Investment Options and Rental Yield parameters.