Investors selling unsold inventory
Developers have been fast in catching the changing market sentiment that is going to look positive after several quarters of negative outlook. While the home buyers are still showing much caution and staying away from the enquiry counter. The developers have been finding another route to get the unsold inventory that has been absorbed.
The changing outlook has seen the entry of the private equity (PE) investors who have been looking for big ticket purchases and quite a few have lapped up the full lot of the unsold units in the several projects. The advantage for the investors is that he will get a handsome discount from the developers and then the aims for all the food capital gains over the medium to long term. The developer has also been benefiting as he had found an opportunity to liquidate the asset that generated little return for him and can focus on the fresh investments.
The PE fundings have been drying over the last few years on the reason of weak economic activity, poor shape of the real estate industry and slow down in the end under user demand. However, since the beginning of 2014, there has been changed interest from the segment of the investors. The main factors that drive the PE investments in the expectation that the economic environment is set to improve which would result in a hike in the property prices.
Sources: The Financial Express
