Hyderabad realtors are expecting the government to announce a revision in the mandatory quota for low income groups and the poor pegged at 20 per cent for big plots now that the by-polls are over.
Indian real estate companies, which borrowed heavily during the peak of the economic cycle and rosy business forecast, are now caught in the vortex of piling debt post-slowdown. Most of the realtors who went on a land bank acquisition with borrowed money are struggling to repay even the interest and banks look reluctant to restructure the debt any more.
The property market in Gujarat has touched a size of Rs 72,300 crore, after it grew by 30 per cent in terms of value during 2011-12. Though unofficial estimates show the actual size of the real-estate market at Rs 1 lakh crore, figures from the state revenue department show 9.07 lakh property transactions happened across the state in 2011-12.
Over the last year, there has been an unequivocal crystallization of Indian cities that continue to attract serious investment into real estate. This is directly correlated to the economic dynamics now working in the country. If India is to achieve even a conservative GDP growth of 6% per year, it emerges that only three cities – Mumbai, Delhi and Bangalore – have the potential to deliver. The reason for this is that close to 2/3rd of the overall development of office space in the country is now taking place in Mumbai, Delhi and Bangalore.
Parsvnath Developers has reported a net loss of Rs 23…
Being blamed for being a haven for black money cartel, realty players broke their silence and instead tried to put the blame on the government for not introducing the desired reforms in the sector. However, they did not spell out if reforms are prerequisite to check the cartel of black money in the sector, why are they opposing the realty bill and a regulator.
The Indian banks have been hit the worst with the downturn of the real estate sector. Even after restructuring the loans to the developers, they have a collective deficit of Rs. 7 lakh crore. With spiraling input costs & property prices, demand in the real estate sector has been on a steady downfall. Given the declining demand, it is is unlikely that the real estate companies will be able to repay their bank loans, especially since banks are the only source of funds for the sector.
While property still remains the preferred choice of investment of nearly all the Indians, as high as 92 per cent, they are pretty scared of trading in the property market now. While new launches have few takers, most of the transactions are happening in the ready-to-move and other secondary market options.
Nearly seven out of ten, 68 per cent, home buyers prefer ready-to-move property because they can avail for tax benefits only after the possession of the house. Saving tax on the EMI’s is one of the big reasons why nearly eight out of ten, 78 per cent, plan their house buying.
There is a clear disconnect between what home buyers want and what they get. And it is here that the home buyers are ready to pay more to get what they see to believe. While the frequency of launching new residential projects have declined in the last year or so, there is also sizeable inventory building up that is available for buyers who are willing to make that investment.