Slowdown in Property Demand in Next 12 Months
The country’s leading realty consultant Jones Lang LaSalle pointed out that the projects would be delayed, unsold housing stock will rise and developers might have to offer new projects at 10-15 per cent discount, all because of a slowdown in property demand. Indian real estate sector is likely to see a gloomy phase in the next 12 months and developers would face liquidity crunch, low sales and pressure on margins.
The consultant observed that high interest rates, increase in vacancy and demand slowdown will impact the earnings of developers leading to a slowdown of construction activity and delay in project delivery. Besides, the distressed projects of smaller developers will be acquired by medium-to-large players at prices significantly lower than their original valuations.
Major firms like DLF is selling its non-core assets to cut its huge debt that stands at over Rs 20,000 crore. Unitech at present has debt of about Rs 4,000 crore. Besides, the distressed projects of smaller developers will be acquired by medium-to-large players at prices significantly lower than their original valuations.
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