Real estate market – is it heading south?

August 7, 2008	(Be the first to rate this story!)  Loading ...
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The real estate industry had a decent run during 2007 with market witnessing upbeat demand for products across all segments – office space, residential, retail, etc. Naturally, corporates managed to garner good realisations. Enthused by their success, a positive sentiment reflected in the IPO market, where major real estate companies raised around Rs 14,600 crore during the last year.

The scene was no different in the private equity space, where real estate (or realty) topped the list of all PE deals by value. But that was 2007. Year 2008 has begun on a subdued note. Buyers are waiting for prices to fall further as sellers are waiting for the downturn to be temporary. Home loans getting costlier hasn’t helped, neither has inflation. Property Plus talked to Mr Venu Gopal, Associate Director and Mr Ganapathiraman, Associate Vice President part of Transaction Advisory Services, Ernst & Young.

They feel projects having a limited time frame of 2-3 years may face a crisis. However, they also note that any project having a life of 5 years and above may not be affected in the long run as the current slowdown in the market is temporary. They advice landowners to be cognisant of the fact that markets are slowing down and it is surely not what it was in the last 2-3 years. “In the given circumstances, land owners looking for an exit in the immediate future should be moderate in their price expectations otherwise they may find it difficult to justify their valuations,” the experts feel.

News Published Under:   Real Estate India |

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