According to experts, the killing in stock markets, where realty stocks have taken a beating along with the rest, may speed up the slowdown in the real estate market over the next six months.
Balaji Rao, managing director, Starwood Capital India Advisers, said, “The market is already slowing as high property prices have affected sales”.
Even as realty stocks are quoting at huge discounts to their issue prices (DLF at Rs 479.85 against Rs 525 issue price; and Omaxe, Parsvnath and Puravankara at 40-50% discounts) realty is suddenly looking scary for investors.
Many investors are thus opting to book profits by selling their flats at up to 15% lower than the builders’ rates. These are investors who don’t want their notional profits to be eroded if the rates decline.
A recent report by Credit Suisse says that though developers insist that prices have remained stable or are increasing, they are finding it difficult to raise funds from the equity and debt markets.