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Weak Stock Market to take Toll on Real Estate
| March 19, 2008 |  (Be the first to rate this story!) Loading ... |
Monday’s bloodbath on the Bombay Stock Exchange, which saw the sensex tanking another 950 points, has made the real estate industry jittery and on the edge. The property market in most parts of the country is currently witnessing a slump in demand and the precipitous fall in the stock market is now bad news for developers.
Real Estate Developer Pujit Aggarwal of Orbit said over the past three months, sales of residential and commercial office space has virtually come to a grinding halt. “I can clearly see a correction in the property market with prices falling by up to 30% in the next one year to 18 months,” he said.
According to him, some reputed firms who were in the process of doing up their interiors have not stopped work. “The demand for commercial space, 50% of which was driven by financial institutions has dried up. If the stock market decline continues, places like Thane, Jogeshwari and beyond will see huge corrections,” Aggarwal added.
HDFC chief Deepak Parekh said the stock market has fallen by almost 35% in the past couple of months. “A crash of this magnitude is bound to have a fall out on the real estate market. The rationale is that when the stock market is bullish, people are more comfortable buying property. Now that there is a hit, the real estate market is bound to slow down.”
He further added, “Investors have withdrawn from the real estate market. There may not be an impact on prices in south Mumbai, but certainly in other cities like Gurgaon, Noida, Bangalore and Hyderabad.”
Chanakya Chakravarty, MD of Actis Advisers said Monday’s meltdown will hopefully bring some semblance of reality to the real estate market. “Anyway real estate values are correcting across India and we hope the illogical land valuations will stop.” Anuj Puri, chairman and country head of Jones Lang Laselle Meghraj said the stock market crash will hit the sentiments badly.
News Published Under: Real Estate India |
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