Realty Market Braces for Accelerated Slowdown
Stock Market Downturn Exerts Pressure on Realty Sector
Experts predict that the turmoil in the stock market, which has battered realty stocks, may hasten the slowdown in the Indian real estate market over the next six months.
Existing Market Slowdown
Balaji Rao, Managing Director, Starwood Capital India Advisers, noted, “The market is already slowing due to high property prices affecting sales.” This slowdown is further exacerbated by the plummeting stock market.
Realty Stocks at Historic Lows
- DLF: Trading at Rs 479.85, significantly lower than its issue price of Rs 525.
- Omaxe, Parsvnath, and Puravankara: Stocks are down by 40-50% from their issue prices, indicating a nervous investor sentiment.
Investor Sentiment Shifts
Many investors, cautious of potential losses, are opting to sell their flats at up to 15% below the builders’ rates. This move aims to safeguard notional profits from potential erosion if prices decline further.
Funding Challenges for Developers
A recent report by Credit Suisse highlighted that despite developers' claims of stable or increasing prices, they are facing significant difficulties in raising funds from both equity and debt markets.