Realtors worried over repayment of bank debt
The impending closure of the financial year has the listed real estate developers scurrying to make final repayments or get debt refinanced.
The impending closure of the financial year has the listed real estate developers scurrying to make final repayments or get debt refinanced.
Stocks of real estate companies suffered widespread losses on the BSE today dragging down the sectoral index by 3.14 per cent on all-round selling by funds on fears of rate hike by RBI to curb inflation.
As real estate prices shoot up and interest rates, the outlook for the sector does not look too bright. In its year-end report, Knight Frank has stated that new home sales in India have fallen by 25 per cent due to soaring prices. With the Reserve Bank of India tightening lending norms to developers and raising interest rates, the property market is likely to plumb new lows in 2011 as buyers disappear.
The Mumbai realty market is awaiting a policy change by the Maharashtra Government that could appreciate the prices in South Mumbai, while soften up the market in the suburbs. Real estate prices in South Mumbai range between Rs 20,000 and Rs 1 lakh per sq ft, whereas the rates in the suburbs range between Rs 6,000 and Rs 40,000 per sq ft.
With the economy giving indications of recovery and real estate companies putting up a brave face, the question as to whether this is the right time to buy property has yet again been raking up. If the industry figure is to be believed, it seems many of the prospective home buyers who had put their plans on shelf due to the threat of job loss & inability to pay the EMIS borne out of recession are back in the property hunt.