Realty is a fragmented market. Local factors are the biggest influence.

In a previous post, I had mentioned that “big name” realty companies are fringe players.

Realty is a fragmented market.That means there are several thousands of companies that serve the demand in the industry.No player has a market share that is considered significant as compared to the overall size of the market.This is how the real estate market was in India and will remain as such.So stop chasing the “big name” realty firms – they are good with propaganda and want to make you believe these dozen companies construct every single home or every single good home in India.There could be nothing farther than the truth!

Realty is also a local market. The price of housing and the demand supply are mostly determined at a local level.Though macro factors affect the pricing, it doesn’t affect each real estate market uniformly.The state of the industry supporting the employment of the local population has a big impact on the pricing on that city or neighborhood.If there are very few developments in a neighborhood, then due to the supply bottlenecks, the pricing of the existing homes in that neighborhood may be high.Similarly, an oversupply of homes in a neighborhood causes a price reduction (as seen today in Nizampet opp. JNTU Kukatpally).

The “big name” realty firms use their almost total control of media and public relationships to create negative impressions about small firms – quality of construction is not good, they will not be able to survive, quality of material is suspect etc.However, the truth is that housing will be fragmented.There will be good, average and bad realty firms.This will be irrespective of the size of the firm.

A home is a big ticket purchase – you need to assess a property properly and make the right choices.You are not buying a cup of tea for Rs.5/- that you can shrug off and walk away in case you don’t like it how it tastes.You will have to live in that home for a long time and possibly an entire lifetime.A good choice will mostly likely take a lot of hardwork, patience and analysis.So be prepared for it!Having the right frame of mind and expectation wins half the battle!

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