Indian real estate markets have
been going through a rough patch from 2007. Property developers are facing
liquidity crunch and seeking for alternative options to keep the ball rolling.
Demand curve for residential properties is moving south while the cost of
construction is steadily rising. According to a senior official of Indiabulls,
real estate developers who have been reporting good results and possess sound
financial base, are taking contingency loans to support their financial well
being.
Mumbai has always been the
trendsetter in the indicative property prices of real
estate India. With the opening up of the retail market, there has been a
growing demand for retail properties in Mumbai. This has created a viable
market for mall space and other retail stores and showrooms. Currently, the
real estate investors are mainly HNIs, but a large volume of institutional
money is expected to be flowing into this sector in the coming years.
The National Capital Region (NCR)
of Delhi, Gurgaon and Noida is witnessing a slowdown in demand for residential
properties for the past couple of years. Spiraling cost of financing home
purchase, rising property values and inflation has resulted in slackening
markets. Real estate investors who made millions in a short period of time in
the booming markets earlier are now looking at corners. The chances for return
on property investment have come to bottom. A number of real estate developers
have reduced their selling price, in order to induce buyers.
The cyber cities of Bangalore and
Hyderabad have seen an oversupply of residential units between the price range
of Rs 50 lakh and Rs 1.20 crore. Most of such projects were launched in 2004-05
when Indian real estate markets were going through an unprecedented euphoria.
But, 2-3 years down the line, the markets reached a level where correction was
a need rather than event.
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