Are we heading for a US style correction ? Maybe not but there will be a big correction nonetheless.
Looks like there is a recession coming in the property mkts, after the initial spike up in rents the rents have also started to collapse , showing a push of realtors to rent out property that isn’t getting sold. I has written about it before in Mumbai Property market cracking?
The biggest indication to me is the Change in Saturday – Times of India, as the Property times pages have been substituted by Times Life , something that tells me that there is a real pinch in the realtors pockets such that the paper cant fill up 5 pages with adds. Property stocks are leading on the way down and have had a massive decline in value on the NSE.
Worse the Foreign money including VC’s and Funds that was supposed to come in and take a stake in the new developments of major players like Omaxe DLF etc have all dried up thanks to the contraction and crises in the US market.
ET says in REAL TROUBLE MARS PROPERTY.. Read
Current market stats reveal that there has been a drop in both retail and office rental values in the last two months which varies from 25% to 50% in some micro markets such as Gurgaon and Greater Noida, where malls and office space have seen a dip of 25-50%. Overall, the rental rates in cities such as Kolkata, Chennai, Mumbai, Pune and Bangalore have also dropped by 25-30%.
According to industry sources, there has been a 35-40% over-supply in residential apartments in the last eight months. And the reason is evident — a dip of as much as 30-40% in the transactions this year as compared with last year.
In fact, both investors and end users of the residential property sector are anticipating a blanket correction in prices in the wake of the over-supply situation leading to a further slowdown. To offer a solution to the over-supply situation, various developers have started to offer discounts and freebies to attract buyers
Mid day ran an article talking about the big push of realtors into building in far flung areas like Karjat and Kasara on mumbais outskirts.
Dna talks about the fear in the builder lobby by quoting
An exasperated Ramni Shastri, managing director of Sterling Developers, had a suggestion for those wanting to buy property: “The media is hyping the decline, so when you see stories of a slowdown in news channels, just switch off your TV set. When you read the same thing in newspapers, stop buying the papers.”