Mumbai/New Delhi/Bangalore: the global financial turmoil have downgraded the US rating and also left an impact on Indian real estate sector by putting a freeze on the real estate office rentals as well as on foreign capital. While India’s real estate market is handling its own internal issues like soaring rents, high property prices, banks restricting lending, etc there arises external issues creating a havoc over the Indian real estate sector.
According to Mr. Chintan Patel, partner real estate practice, Ernst and Young, the impact of the US and Europe economy on Indian real estate sector can be related to the panic experienced during the first days of the Lehman Brothers Holdings Inc. Bankruptcy which took place in 2008-09 slowdown. The only factor which lies in favor of the market is that due to this impact the affordable housing demand won’t be affected much unlike the demand for luxurious projects. The earnings in the June quarter of many developers have been dismal, most of it in Mumbai and the National Capital Region (NCR). DLF has a debt of Rs. 21,500 crore, Unitech Ltd. of Rs. 5000 crore, Emaar MGF Ltd. of Rs. 4000 crore and Parsvanath Developers Ltd. Rs. 1,200 crore.
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