When the Reserve Bank of India (RBI) was to announce its annual monetary policy for 2012-13 on 17th April, there were widespread concerns of slowing economy, rising inflation, trade deficit of 4 per cent of GDP and drying FDI too emerging as a grace concerns
The real estate sector has welcomed the CRR rate cut by the RBI and said it will help revive demand in the housing segment.
Fitch Ratings’ outlook for 2012 for the Indian real estate sector is negative due to weak overall demand and higher construction costs, which are likely to continue to squeeze margins.
With benefits under STPI scheme gone and deadline to fully avail SEZ benefits set for March 2014, demand for SEZ space is expected to witness some momentum in 2012.
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.
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 impact of slowdown is already being felt on the real estate market with residential segment witnessing sluggish demand across all the major cities.
DLF on Tuesday, August 2, reported a 12.81 per cent decline in its consolidated net profit for the first quarter ended June 30 at Rs.358.36 crore.
Oberoi Realty plans to expand its land holdings in key cities as debt-laden rivals struggling with rising costs and slowing sales look to cut assets.
At least four firms, Ansal Properties and Infrastructure Ltd (Ansal API), Emaar MGF Land Ltd, Kumar Urban Development Ltd and Paranjape Schemes Constructions Ltd, have received fresh sanctions from banks, although overall lending to the sector remains subdued.