Beyond what is happening in the strategic board room meetings of realty companies, market is cautiously optimistic that with the inventories piling up, developers will sooner or later be forced to blink. A look at the recent developments in the sector does indicate that prices can come down, but it all depends on the builders holding power.
The over-heated Mumbai property market is taking its toll on the property transactions and sales in Mumbai property is the lowest of the six major cities across the country. According to reports, over the last one year leading to December 2011, residential sales in Mumbai have dropped by 28 per cent.
Mumbai continues to be the costliest property market in India but the sales graph show this value has started taking its toll on the volume. Property registration in India’s biggest real estate market continued its slide and in September recorded a 29-month low at 4,137, down 22 per cent year-on-year.
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.
Rising cost and falling transactions are taking their toll on the property market in both the Delhi-NCR and Mumbai.
In a macro economic perspective booms and slumps in realty market predominantly affect active investors and traders in property who want to make money on every deal they make.
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.
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.
Forget Mumbai which has been in the news for record dip in the property transactions. It is the Delhi-NCR that tops the list for unsold homes.
The global debt funding gap is estimated to total US$142bn over the next three years (2012-2014) according to latest research from DTZ.