India Ratings & Research- Real estate prices still high In spite of weak Demand

The continuous weak end user demand and adverse consumer sentimentalities, India ratings & research has maintained negativity to steady outlook on the real estate sector for 2014-2015. It said that, “Real estate companies are keenly facing some realty aspects like minor fall of unit sales, flat income and continual weakening in the credit metrics and cash flows.”

The entities selected at investment grade are either residential firms with healthy sales and robust cash flows or particular commercial properties with long term rent agreements. India ratings & agency considers credit metrics will endure to deteriorate in financial year 2015 as high residential prices endure to influence sales, even while rising bank credit to the sector shows a rapid increase in the inventory for the sector.  

In the first half of 2013-2014, the sale of fresh residential units observed by the real estate firms has seen a descending tendency. It is due to weak customer sentimentalities and low real estate reasonability due to very greater prices. Prices continue to remain high despite the slow moving demand, as the demand from stakeholders and investors have been raised by the possible efforts of government to restrain gold imports.