Low interest rates coupled with falling real estate prices are presenting a buying opportunity to the end user both in residential as well as in commercial Indian real estate market. Residential Indian real estate market has seen lot of action in last couple of months. Most of the developers have recently launched and successfully sold their units in affordable housing segment.
New residential projects were mostly launched in Tier1 & Tier 2 cities. Most of these new residential projects got sold within first few days of booking. Developers collected a good percentage of money even before the construction had started. That would help them to fund part of the new construction.
Only worrying factor in the market is about the schedule deadline for the completion of the projects. Since most of the Developers had ran huge debts and big inventories due to recent economic meltdown, it remains to be seen whether these developers will adhere to the deadlines.
Although most of the leading developers have raised money from the market through equity sale or QIP to service part of their debts, it would be interesting to see how they use this fresh liquidity. Experts are hoping that the money raised by selling units from fresh projects is ploughed back in those projects and not in servicing their debts.
There is another twist to real estate revival. Some experts are debating whether the real estate revival is due to end users or due to investors, who are looking to make some quick gains. According to experts lot of new residential projects that got sold within first few days of their launch were in fact picked by investors. With market sentiment improving, investors are ready to cash in before the prices further inch up.
Experts may keep debating this fact, but for property developers it might be early Diwali. Hopefully!
For latest info on Indian real estate log on to www.findind.com
No comments:
Post a Comment