Real estate sector outlook stable by Indian Ratings
New-Delhi- The country’s real estate sector 2013 outlook was revised by Indian Ratings to stable from negative due to the improvement in margin and liquidity of developers seen by the Fitch group.
India Ratings has noted an encouraging trend of the ease of liquidity pressures. Real estate companies in the financial year of 2012-13 saw a positive cash flows with the trend expecting to continue will 2014.
As per an official from India Ratings, the outlook of real estate in India has been showing improving signs along with stability.
The visible cash flows for the commercial real estate developers through lease and rentals witness a better credit profile. The report also stated that the demand for retail space might probably be muted in the coming months.
Key factors like persistence of adverse sentiments, rising inflation and high interest rates reducing the affordability along with high property prices are being a hindrance in the demand.
Due to the constant growth IT sector, the commercial demand will be impacted leading to the companies seldom relying on the debt financing and rather concentrate on buyer advances and internal accruals to develop.
As the last year observed a great demand for the residential real estate developers, there was a decline in the sales of large realty players in the year 2012.
Eventually factors like economic weakness, salary freezes and associated apprehension of employee downsizing has impacted the consumer sentiments.
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