global economic turmoil means the Indian real estate sector is bound to be affected in the short to medium term. Will this offer good opportunities to those who are flush with cash to invest in the property in India? Some Industry experts give there views.

Cushman & Wakefield
Executive director of global realty consultancy firm, Cushman & Wakefield, Kaustuv Roy said that 2012 will have to be year for the real estate sector due to some factors which will have a far reaching impact.

Tight liquidity
The developers’ tight liquidity position will cause stress not only to the consumers, but also to the banking sector as their exposure is huge. Because of the tight liquidity condition, developers may find it difficult to deliver on time to the buyers.

Uncertainties in the job markets
At the same time, because of the turmoil in the economy, there will be uncertainties in the job markets too. This may discourage the young buyers, who play an important role in the residential realty market. Therefore, Roy said, in the residential sector, there will be high dependency on the Indian corporate performance, and if the economy is slowing down, demand may dry up, which is likely to lead to residential prices softening.

Jones Lang LaSalle India
These developments will not only dry up the future demand but also lead to tightening of liquidity in the sector. In that case, developers will not go for fresh launches. “The absorption rate – meaning the ratio of sales over inventory in the market – is likely to be low, and the incidence of new launches will decline,” said head, Research & Real Estate Intelligence Service, Jones Lang LaSalle India, Ashutosh Limaye.

Further interest rate hikes by the RBI
“Because of the prevailing uncertainties in the global market and the likelihood of further interest rate hikes by the RBI in the early part of 2012, sentiments in the residential market will remain cautious over the short term,” said Limaye.

Cautious optimism
Roy also said that overall, 2012 will be a year of cautious optimism with the hope that the Indian economy is suitably insulated from the western economies. However, he felt, for the sector 2011 has turned out to be a mixed year. The first half of the year was extremely good, but by August, the market sentiment underwent a change, depicting more caution in the air.

Standard Chartered Bank reports from the last 6 months BSE Realty Index has not given any good news and world realty index by 47%.

BSE Realty underperformed 500 by 36%
Also Mumbai-based brokerage firm Ambit Capital Pvt. Ltd. reported that since April 2010 BSE Realty underperformed 500 by 36%. However there are several other reasons those are affecting to the property market.

Slowdown in sales property
High rates of property in Mumbai and Delhi, rising interest are showing challenge to Homebuyers as slowdown in sales property is the big concern.

Valuations will improve by 2012
Whereas as there are negative signals in the property market. “Debt equity ratio will reduce by 50% by 2012” Standard Charter report said. The report more added that valuations of these stocks will improve as these companies are on a stronger footing than in 2008, as most continued and forthcoming projects will contribute to their operating cash flows

The Indian Union Budget 2011 pointedly ignored the larger issues affecting the Indian real estate sector at this sensitive stage of revival and growth according to Jones Lang LaSalle India (more…)

Western India saw a rise in real estate values across cities during the Jul-Sep 2010 period with a few key localities witnessing maximum growth. (more…)

Six Indian real estate companies, all set to raise over $2.9 billion or Rs 13,000 crore through the capital market, have postponed their plans till the middle of next year. (more…)

The Reserve Bank of India has observed that residential property prices in India are shooting up in most of the major cities, especially in Delhi and Bangalore , while in Mumbai it seems to have reached a plateau. (more…)

The credit ratings agency CRISIL recently launched real estate ratings in India, which would help common buyers make informed purchases. It is expected to bring in more transparency to the Indian real estate sector and will work on a project-specific basis. (more…)

There are few takers for affordable Indian houses now, according to a report released by PropEquity, a real estate consultant. (more…)

The Delhi cabinet gave nod to a proposal to significantly increase the registration fee of real estate in Delhi. (more…)

The Rajasthan government is planning to set up a real estate finance company in collaboration with World Banks arm International Finance Corporation (IFC) to facilitate affordable homes in the state. (more…)