Monday, December 29, 2008

Realty industry wakes up to reality: Bubble has burst

Looking ahead, the industry does not foresee any upswing in fortunes in the immediate future, though the government and the central bank have been taking steps to infuse additional liquidity into the system, especially for sectors such as housing.

“This situation seems likely to persist for another 8-10 months at least. Most of the projects are getting delayed and buyers are not showing interest,” said Cushman and Wakefield’s Verma.

“Due to higher risks of investing in real estate, the real estate sector will witness lower private equity deals in the next 12 months,” warned a report by the Federation of Indian Chambers of Commerce and Industry (FICCI).

“As funds will not be easily accessible, valuations are expected to go down further and the costs are going to be very high for developers,” said FICCI, adding that existing projects were witnessing time and cost overrun, while new projects were being deferred.

“This would eventually lead to a reduction in price in the coming four quarters and the market is expected to turn in favour of the end users. Focus will shift to mid range and affordable housing with a considerable correction in prices of the existing residential projects up to 15 percent.
To read more, please, visit - ThaIndian

Related Stories:

1) Affordable houses to rule the roost - Dileep Athavale

2) Indian real estate is facing negative sentiment caused by the global economic meltdown - Kumar Gera

3) Home buyers can expect a better deal in the New Year

4) Realty, automobiles or IT, no escape from slowdown

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