Is there no end to real estate woes?
The real estate sector has been lying low due to lesser cash inflow in both the commercial and residential segments, hoping that there will be a change in liquidity levels soon.
The macro-economic factors such as high interest rates, high land costs, etc. which have a direct effect on the sector, seem not to improve at least for now making sure that there will be no end for real estate woes in the near future.
Samantak Das, Director-Research & Advisory Services, Knight Frank India, calculates that the rates will not reduce for another quarter at least.
The Reserve Bank of India (RBI) has increased the repo rate from 5.25 per cent in the fourth quarter of 2009-10 to 8.5 per cent in the fourth quarter of 2011-12, and this has laid its impact on real estate sales and interest cost of companies.
Interest costs of listed companies are rising while the net profit is seeing a downtrend. The scenario is likely to continue until there is a noteworthy improvement in the whole Indian economy.
To read more real estate news:
Realty companies give out striking dividends
MMR property sales slump over 50%
Source: The Hindu
Commercial, Indian economy, interest cost of companies, Knight Frank India, liquidity, listed companies, net profit, Real Estate Sales, Real Estate Sector, Reserve Bank of India (RBI), Residential, Samantak Das
[...] Is there no end to real estate woes? [...]