IMPACT OF PREVAILING FACTORS ON INDIAN REAL ESTATE INDUSTRY TO SHOT DOWN.

We are seeing a broad based real estate pullback, with prices increasing in most tier-1 and tier-2 cities in India, alongside sharp drops in transaction and new launch volumes. The drivers for this slow down are a mix of supply-side factors (banks have pulled back lending to developers) and its demand-side factors (Black Money Bill has created fear amongst speculators) making any property practically unviable for purchase. However, despite this the real estate industry has been trudging on that was until last year. In 2015, couple the existing pressure points with a slowdown in the global economy, which slowed India down too, and had effect on customers postponing their buying decisions indefinitely. The result is not just a drop in demand for building sales and challenges for lenders with big mortgage, but also generalized slowdown in GDP growth as the sector which drives 50% of India?s cap expenditure and 30% of its jobs. The real estate industry now has an inventory pile up of 46 months in the Mumbai Metropolitan Region (MMR).The rising prices and falling demand led to stagnation in the industry in 2015, pushing prices down by 0.95 and 3.23% in MMR region and Mumbai. The quarter to quarter fall is 0.99% in MMR and 1.51% in Mumbai. However union cabinet?s approval of real estate bill in early year is expected to pace for real estate industry in this year. This paper magnifies the vital factors which had major effect on drastic increase in the prices of the houses and implements various measures to slow it down in the coming year.