Real Esate Inventory

Greed and corruption account for a major cost of Construction. Further,the interest rate, cost of construction materials, transportation costs and establishment cots add to the over all cost of inventories which are becoming unaffordable to the majority of the people who are finding it extremely difficult to pull on the days in these days of unstoppable price increases effected all round thanks to the mismanagement of the economy leave alone going for a shelter. Builders have no choice but to bear the cost and carry on or offer houses at a discount. Those who have already bought two or three flats for speculative purposes cannot think of investing further as their money is also locked up. Black money holders have other avenues for investment without being noticed or tracked.Banks will have to bear the brunt of these inventory build up as most of the builders use public funds for their business development activities. Some of the losses are borne by the shareholders of these companies. This is a vicious circle and cannot easily broken. First time purchasers have no scope at all.

Dr.T.V.Gopalakrishnan

( This comment is in response to an article Real Estate owners build up of  inventories cross 58000 crores that appeared in Business Standard dated 23/9/13)