Property Downside Brings Tough Time for Builders, Investors

May 8, 2007	(1 votes, average: 1 out of 5)  Loading ...
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After the two years long Bull Run, property prices in India have set for slowdown. And coupled with soaring home loan rates, the residential property has turned the home dream sour. As the real estate prices are slipping fast, the situation has sent shudders through property developers, investors as well as end users.

Adding to the woes of builders is a regulatory/capital market squeeze along with an impending demand, says Citigroup. However, there still are growth prospects for the developers and capital providers if certain entities such as potential and size of Indian real estate are taken into view.

Experts see economic growth, demographics, and rising household aspirations to drive the demand in future. They indeed foresee large development volumes, inversely related to price.

Falling property prices are believed to be bringing the affordability levels of consumers back and reviving demand as well. However, it may hurt real estate stocks in the whole procedure. The direction of interest rates remains crucial to the property development cycle, says the report revealed by Citigroup.

Real estate stocks may stay unstable for sometime. They are newly listed and are highly sensitive to interest rates. Incomes are rising fastly on sale of old landbanks, and the industry is still evolving and under control.

Citigroup expects an unparallel property build in India’s history with the real estate prices playing a critical role. Lower prices will give birth to larger opportunities whereas higher prices will lessen the development.

News Published Under:   Real Estate Trends |

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