A big Ambit report is doing the rounds – they predict that real estate will fall big time.
We are seeing a broad-based real estate pullback, with prices correcting in most tier-1 and tier-2 cities alongside sharp drops in transaction and new launch volumes. The drivers for this slowdown are a mix of supply-side factors (banks have pulled back lending to developers) and demand-side factors (the Black Money Bill has created fear amongst speculators). The result is not just a drop in demand for building materials and challenges for lenders with big mortgage, LAP and housing finance books, but also a generalised slowdown in GDP growth, as the sector which drives 50% of India’s capex and 30% of its jobs conks off.
The drivers, they say:
ICICI has the most exposure to RE:
Indiabulls housing has the highest relative LAP (Loan against Property) portfolio:
We have been noticing a slow down in real estate for around a year now, and it’s looking rough. From our own research (anecdotal, though):
More data as we see it!
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