Real Estate industry in India-Bulls are back on the Dalal Street and Indian share markets have made a sharp recovery in today’s trading session. The Sensex started the day in red and touched a low of 19,101 in the morning. However, it rebounded into the green and headed northwards as the day progressed. Huge buying in auto, banking and capital goods stocks pushed the index up to a high of 19,731 towards the end of the day. The Sensex finally ended with a gain of 434 points at 19,696 and the Nifty added 125 points at 5,911.

Real Estate industry in India is dominated by likes of DLF, Unitech etc.There is some positive news about the Indian stock market. Reality stocks like DLF, Unitech, Oberoi Reality and most of the other reality stocks closed in green. But things are not so good for the Real Estate sector in India. As per recent reports on it, buyers are staying away from the real estate projects.

Real Estate industry in India is expecting prices to dip. This dip is going to vary based upon the regions. Rates will drop across all major locations in India.  Demand is still there but there are other factors which are affecting the reality market. In last few years, reality prices have gone up significantly. There are lots of projects which are stuck and most of the real estate projects are delayed.

There is always a sense of doubt when it comes to real estate developers and brokers. Most of the developer deals with the customer through brokers which also makes the process non-transparent. Due to lack of transparency, buyers are avoiding slow moving and pre launched projects.

It is affecting the liquidity with real estate developers. They have to depend upon banks for most of the funding and with the interest rates going high consistently, cost is moving higher and higher. For construction, developers mainly rely upon construction linked installments and with the customers shying away from these projects; it is becoming extremely difficult for them to continue with the work on the current projects.

But Real Estate Developers and brokers are responsible for this. They have left low cost projects and focused on high end luxury projects. At the same time, they pushed prices deliberately and gradually prices became unaffordable for the most of the buyers in India.

There are many projects which are running late by 2-3 years. Some time there are issues with the land and there won’t be any big deal even if there are some other legal issues with the project itself.  In the past few months, there have been reductions in the reality sales registration in the Mumbai which is one of the biggest reality markets in India.

Interest rates hike has also made life difficult for the buyers as well as sellers.  Reality stocks have got the lot of beating and are expected to remain volatile in the short term. Stock markets often move in predictable manner and with the fact that, RBI is looking for another rate hike, these stocks may again get the beating once it is officially announced.

Real Estate industry in India is still in a very premature state and it has long way to go.