Affordable markets shine in realty game: Report

Affordable markets shine in realty game: Report

Affordable markets shine in realty game: Report

 Developers in relatively affordable markets such as Bengaluru are likely to fare better than their counterparts in Mumbai and Delhi in terms of cash flow and sales, according to Moody’s Investors Service.

“With the challenges in the operating environment, developers such as Indiabulls Real Estate, Lodha Developers, Unitech, DLF and Oberoi Realty will experience relatively more pressure on sales and cash flow, because they operate in Delhi and Mumbai, areas where prices are the highest,” Moody’s Investors Service said.

In contrast, developers in relatively affordable markets like Bengaluru, such as Brigade Enterprises, Prestige Estate Projects and Sobha Developers should fare better, owing to stable demand for housing, Moody’s added. India’s largest property developers will continue to face a challenging operating environment over the next 12 months — including weak cash flows, flat sales and stagnant prices.

“At the same time, despite the difficulties, we expect solid economic growth in India in 2014-15 to provide some support to housing sales, while the likely gradual easing of lending rates will also boost investor confidence and investment activity,” Moody’s Vice President and Senior Credit Officer Vikas Halan said. The ability of developers to execute projects has been challenged in the past 2-3 fiscal years, owing to delayed approvals. Such delays have slowed the flow of payments from homebuyers and reduced investor demand for new projects by locking up their capital and decreasing their expected returns.

Realtors in affordable markets to fare better
Affordable markets reflect a stable demand
RBI’s rate cuts to help both developers and customers

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