Prediction About Realty Trend

For now, the next few quarters could be the acid test for the sector. The stock prices of many real estate companies are under duress. DLF’s offer for a share buyback comes at a time when the stock price has been adversely hit. While one could argue that the overall sentiment is on a low, the fall in these stocks has hit the investor really hard.

At such high price levels for property, the buyer is taking his time which does not augur well for the developers. It is precisely for this reason that the uncertainty has stepped in.

HDFC’s Karnad admits that there are some pockets in India where prices need to correct further. “However, today, the real estate sector is going through a stage of over-pessimism,” she argues.

The story of the aspiring Indian middle class is hard to ignore and that could be urge to own a home could still make sure there is a healthy level of demand. Overall, the impact of a global slowdown on India is slowly being felt. It may affect Indian realty sector in coming time. However, NRIs affections towards Indian properties will not likely to be vanish in near future.

One Comment

  1. Posted July 24, 2008 at 4:40 am | Permalink

    Fitch Ratings said the short-term outlook for India’s real estate sector is negative with slowing demand and growing liquidity concerns, coupled with the tightening bias of monetary policy, leading to a possible negative impact on the credit profiles of real estate companies. But in Fitch’s opinion, this slowdown will also aid the process of weeding out some of the weaker entities within the sector, and increasing the relative strength of some of the larger, more established developers. The rating agency, however, warned that the liquidity risks on account of significant bullet repayments falling due during the course of 2008 remain a key challenge across the board. Larger, established and well-capitalized companies with access to banks/financial institutions would remain better positioned to manage this risk, while smaller players may end up either refinancing these at materially high rates of interest, or could default on their obligations, it said.For more view- realtydigest.blogspot.com

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