INFLATION AND REAL EASTATE SECTOR wrt DELHI LAND & FINANCES

4. SUBJECT MATTERS
•INFLATION IN INDIA
•REAL ESTATE SECTOR IN INDIA
INFLATION: Increase in price level of goods and services, as there is
less money circulated in the economy.
REAL ESTATE: property consisting of land and buildings along with
natural resources such as crops, minerals, immovable property.
INFLATION
Inflation can be explained as constant increase in the level of prices
for goods and services. Alternatively, it can also be explained as
reduced purchasing power .
There are different studies which can be classified as QUANTITY
THEORIES OF INFLATION AND QUALITY THEORIES OF
INFLATION. The quality theory is worked upon money equation,
whereas quality theory is worked upon by sentiments and
expectations of people.

5. There are several Inflation variants:
Deflation is when the general level of prices are falling. This is the
opposite of inflation.
Hyperinflation is unusually rapid inflation. Inflation taking place in
Geometric Progressions is termed as hyperinflation.
Stagflation is when there is unemployment with economy on a
standstill..

6. Categories of Inflation
In Keynesian economics there are two basic types of Inflation:
Demand-Pull Inflation
Cost-Push Inflation
DEMAND-PULL INFLATION:
Demand-Pull Inflation deals with the idea that the demand for goods and services in
an economy is more than the supply, this excess demand pushes up the prices until
equilibrium is attained at a higher price level. So, inflation over here is demand-
driven. Government expenditure, increase in supply of money and increase in the
price level in are the three primary factors that cause the aggregate demand to go
up.
COST-PULL INFLATION:
Cost-Push Inflation results from decline in aggregate supply. Rise in prices of raw
materials and wage rates are the two major factors behind the Cost-Push Inflation.
However, it may even result from the increase in prices of any of the factors like land,
labor, capital and organizations that are known as factors of production. When there
is an increase in the cost of production or operation, profit margin of the
entrepreneurs decreases. The increased costs are transferred to the customers in
form of higher prices. This results in Cost-Push Inflation.

7. Effect of inflation on real estate sector
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8. TREND ANALYSIS OF INFLATION RATE WHICH PREVAILED IN DIFFERENT MONTHS FROM 2009-
2012 IN INDIA.

9. DLF vs. INFLATION
Land Is a scarce resource and the seekers are more, hence rise in prices of real estate
establishment is justified. But when price rises due to factors other than the normal
factors, then they are termed as abnormal factors or abnormal forces and INFLATION
and HIGH BORROWING COSTS are the main culprits of downfall of REAL ESTATE SECTOR
in India
QUANTITATIVE FACTS
The net profit of Delhi Land & Finances, India’s largest Real Estate Company dropped
down to 18 percent to Rs 292 crore for the quarter ended June, compared with Rs 358
crore for the corresponding period last year. This was primarily due to high cost of
borrowing/financing and high Inflation.Quarter ended March, DLF’s net profit stood at
212 crore.Net sales dropped by 10 percent to Rs 2197 crore compared with Rs 2447
crore a 2 year ago period.
The sentiment prevailed in entire Real Estate industry as price levels jumped up so
high that people opted to save than to spend; also the core industry was impacted
which comprises of steel, cement, oil as the prices of cement and steel increased cost
of real estate establishments also increased hence there was double push in the costs
of the real estate property

10. TRADE CYCLES
SLUMP – PRODUCTION SLOWS DOWN DUE TO REDUCTION IN
DEMAND
RECESSION – PERIOD WHERE ECONOMY SLOWS DOWN AND
UNEMPLOYMENT INCREASES.FIRMS LOSE CONFIDENCE AND
PLOUGH BACK THE MONEY
RECOVERY- PERIOD WHERE ECONOMY MOVES BETWEEN
RECESSION AND BOOM
BOOM – PERIOD OF PAST ECONOMIC GROWTH

11. MILLION DOLLAR QUESTION … ????
CAN INDIA PUSH FOR GROWTH INSPITE OF RISING INFLATION WITH RESPECT TO REAL
ESTATE SECTOR?
YES!
Following are the reasons in the support
1.ECONOMIC SURVEY REPORT 2011 – 12
2.ECONOMIC REFORMS BY GOI
3.ROLE OF FOREIGN DIRECT INVESTMENT AND FOREIGN INSTITUTIONAL INVESTMENT
4.MONETARY POLICY OF RBI
5.CORE INDUSTRIES PEGGING UP
6.TRADE CYCLE IS NOT STATIC,BUT DYNAMIC