No end seen to liquidity woes for India’s real estate developers
Most developers rely on banks for funds, and are bearing the brunt of RBI’s directive to curb lending to the sector
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The greed of builders and their brokers made real estate out of reach of the middle class. The rapid escalation in price is more to blame than the interest rates for the current slump in demand. The huge supply of real estate coming in the next 2-3 years will definitely lead to steep correction in prices. Similar stories have played out in the US,UK and China over the past one year and Japan in the late eighties. If the stock market is an indicator of the real economy, then we should fear the worst as Realty stocks are down 75-80% since their peaks in January 2008. But if you are a customer the future looks very bright indeed.
Rishi