Owing to global issues, liquidity is becoming a problem. Though the phase is temporarily, the concern cannot be ruled out. Indian real estate sector is banking on the fact that change will take place and market will come out of the situation.
Since the hospitality sector was previously considered a part of Commercial Real Estate (CRE) and was subject to the same risk exposure, the cost of such debt was high. In September 2009, new guidelines on CRE released by the Reserve Bank of India, asserted that the hospitality sector would no longer be treated as a part of CRE and risk exposure would be based on the profile of the borrower and the nature of the project.
In 1959, Charles E Lindblom, the American political scientist, published a paper in the Public Administration Review entitled The Science of ‘Muddling Through’. In this, he contrasted what he called the ‘root method’ of decision-making with the ‘branch approach’.
It is a highly disappointing budget. The Finance Minister has miserably failed in highlighting the importance the role of Housing in economy, employment generation, apart from the very need of housing. The announcements on ECB for affordable housing is a minor respite but still meaningless.
The Union Budget 2012-13 has left the Indian real estate sector grope with the indecision yet again and everyone is wondering whether the Finance Minister’s offer is glass half full or half empty for them.
Fearing share price manipulation with the help of certain ‘independent’ research reports onIndian companies, market watchdog Sebi may soon bring all kinds of research analysts under its regulatory ambit.
Industry body NAREDCO admits that a lot is needed by the Finance Minister rather than just the tax exemption, which again was needed keeping in view the housing shortage which is one of the biggest challenge for the government of the day.
Replicating global trends, the Indian economy is looking towards an impending slowdown in growth due to decline in consumption expenditure, repeated hikes in interest rates and consistently high inflation.
Indian developers will borrow about $1 billion from private equity funds this fiscal year at rates higher than banks, which are cutting loans to builders, Knight Frank assessment suggests.
The combined net debt of India’s 11 listed developers rose 15 percent in the 12 months through June to 385 billion rupees, according to Mumbai-based Edelweiss Securities Ltd.