Real estate prices still high despite weak demand: Ind Ra
Jan 22, 2014
Source : Business Standard


MUMBAI: India Ratings & Research has maintained a negative to stable outlook on the real estate sector for 2014-15 on the back of continued weak end-user demand and adverse consumer sentiments.

Real estate companies have been facing falling unit sales, flat revenue and EBITDA margins and continued deterioration in credit metrics and cash flows, the rating agency said.

Most of real estate companies rated the agency have a stable outlook, as the risks impacting the sector have been factored into their ratings. The entities rated at investment grade are either single commercial properties with long-term lease agreements or residential companies with healthy sales and strong cash flows.

The rating agency believes credit metrics will continue to deteriorate in FY15, as high residential prices continue to impact sales, even while rising bank credit to the sector indicates an increase in inventory for the sector.

The sale of fresh residential units (in sq.Ft.) by listed real estate companies has seen a downward trend in the first half of 2013-14. This is due to weak consumer sentiments and low real estate affordability due to high prices.

Prices continue to remain high despite the weak end-user demand, as demand from investors and speculators could have been lifted by the government's efforts to curtail gold imports.

The upward movement seen in National Housing Bank's house price index in 2QFY14 after a fall in the previous two quarters supports this argument, as it coincides with the imposition of import duty on gold.




Latest Realty News

Facelift takes backseat
Jan 22, 2014
BHUBANESWAR: Several areas in ward No. 1 are deprived of basic civic facilities, including road, drains and sewerage.
Buildings rise, facilities wait
Jan 22, 2014
BHUBANESWAR: Lodged on the outskirts of the city and along NH-5, the sleepy village of Pahala — famous for its mouthwatering rasgullas — has turned into a mega business centre.
UP government to form a joint venture for Delhi Mumbai Industrial Corridor project
Jan 22, 2014
LUCKNOW: Uttar Pradesh government will enter into an agreement with the centre for developing infrastructure in integrated industrial townships in the state along the Delhi Mumbai Industrial Corridor.
Mumbai to get Rs 4,500 cr infrastructure boost
Jan 22, 2014
MUMBAI: A couple of infrastructure projects to be taken up in Mumbai, entailing an investment of Rs 4,500 crore, will improve connectivity and ease traffic in the city. These are in addition to the over Rs 55,000-crore worth of infrastructure projects in the works – metro rail, monorail and several elevated road corridors.
Tata Housing plans to come up with 5 signature villas in Delhi
Jan 22, 2014
DELHI: Realty major Tata Housing plans to develop a super luxury residential project in the heart of national capital comprising 4-5 expensive villas in a price range of Rs 130-170 crore each.
Experts cite Hyderabad model to curb building violations
Jan 22, 2014
CHENNAI: Unauthorised construction activity is on the rise in the city owing to the shortage of civic staff, so experts have suggested that the corporation follow a model introduced in Hyderabad to curb building violations.
Odiasha govt move to inflate housing cost by 2%
Jan 22, 2014
BHUBANESWAR: A latest government move is all set to inflate housing costs in the state by at least two per cent. The state government has recently revised the benchmark price of flats, raising it by a steep 32 per cent.
Capri Global to continue focusing on the residential real estate projects
Jan 22, 2014
MUMBAI: Capri Global Capital Ltd (CGCL), one of the country's leading non-deposits accepting, non-banking finance company, headquartered in Mumbai has entered into a deal with Monarch Universal Group to fund two residential developments in Roadpali, Kalamboli. Monarch Universal Group is a well-known developer with a track record of delivering residential and commercial projects primarily in Navi Mumbai area.
Credit metrics of real estate firms continue to deteriorate on weak demand
Jan 22, 2014
COIMBATORE: Credit metrics of real estate companies will continue to deteriorate in 2014-15 as high residential prices continue to impact sales, India Ratings and Research has said. The rising bank credit to the sector indicates an increase in inventory, it said.
Developers welcome state govt's affordable housing policy
Jan 22, 2014
AHMEDABAD: Even as the state government brought out details of the new affordable housing policy, the local developers and experts welcomed the move highlighting the growing demand for the same.

Latest Realty News Of State

Realty Talk's