Real Estate Companies still in the race: Warn Analysts

From last few months increase in property market may have lifted the realtors’ sentiment. But costly funding, heavily leveraged books, increasing interest rates and projects are having several hurdles to get approved due to these circumstances worries of real estate sector are far from over, according to the analyst Warn. Realtors stocks such as Indiabulls Real Estate, Lok Housing, Ansal Properties, Prestige Estates, Kolte Patil Developers, Sobha Developers, HDIL, DLF and Unitech have gained 10% to 30% in the previous month. In the last month market has witnessed the overflow in real estate sales sources said.
Real estate stocks would be increase shortly as property rates are more than the listed stock rates, according to the reports.
As per the sector analyst believes that “real estate market would face the slowdown approx two years. Realtors were borrowing at 20-24% interest rate to clear debt on their books before the year-end. According to the yesteryears financial records calculated debts of realtors such as
Unitech, HDIL, Parsvnath Developers, Omaxe, Sobha Developers, Ansal Properties and Prestige Estates ranged between . 1,200 crore and . 5,000 crore. Delhi-based DLF has loans amounting to . 12,637 crore as on March 31, 2010. In spite of developers efforts to reduce debts long term loans are still far way.
“There is no beacon of hope for real estate companies” Shashi Kumar, head – real estate investment advisory, Birla Sun Life Asset Management. Sales have come down and nothing is going into the favor of real estate like banks are not lending to the real estate companies, government delaying in approvals of projects he added.