The Indian realty estate companies reeling under plunging sales and liquidity issues have something more challenging to negotiate-the piling debt in their balance sheet and the banks’ deadline to repay coming close.
Will 2011 carry forward gloom in the realty market? That is the question on everybody’s lips today and the sector seems to be only praying that the worst has been left behind in 2011.
One of the biggest problems afflicting the sector is its high level of debt. The debt load of 11 listed real estate companies stands at Rs.38,500 crore.
A Knight Frank report suggests revenues of real estate companies have dropped by 19 per cent and profits have declined by 70 per cent, over the past four financial years, since 2007-08.
Market forces of demand and supply are the most potent determinants of price and the developments in the real estate industry during year 2011 is the latest example.
What is in store for the real estate sector in 2012 remains the biggest question. Knight Frank believes in terms of the residential segment, the deadlock between the buyers and developers should break in favour of buyers.
While the piling debt of the listed real estate companies has hit the headlines throughout the year 2011, the debt of the unlisted realty companies today stands at Rs.15 trillion.
The real estate sector in Punjab is likely to witness sluggishness in the run up to Assembly elections in the state next month.
Through the course of 2010, the realty sector evened out into a level playing field, with enough traction in the market to hold investor interest, with several on-going projects being delivered and others being launched.
RICS launched a revolutionary concrete panel based mass housing concept – known as ‘India Concept House (ICH)’ in partnership with Sam Circle Venture and its partners, KieranTimberlake and ProjectWell.