Is There a Slowdown in The Property Market?
Private equity firms are playing the wait-and-watch game. Experts say the volume of private equity joint ventures has fallen. And this is because private equity players expect land prices to fall further.
Nalin Kumar, Executive Director & Head - Real Estate, JM Morgan Stanley, said, “I think the real impact will be at the raw material end, or the land prices end. And that will eventually be felt through the entire value chain. In my opinion, the land prices had started to go to levels, which were difficult to sustain, particularly in Class-III towns. The class-II town areas, which were significantly outside the metro limits will get impacted significantly."
But it is not just the tier-II and tier-III cities that will see a correction. Experts believe that certain pockets in tier-I cities, such as Real Estate Gurgaon and Mumbai, might as well see a dip.
Gaurav Pathak, Analyst, ICICI Securities, “As of now, supply is coming up in Central Mumbai, as well as suburban areas of Thane and Navi Mumbai. There could be some amount of correction here in Mumbai. But I do not see a significant downside in prices.”
Private equity is one of the last sources of funding that is open to developers. But with even these deals slowing down, developers could be faced with tough times ahead.
Source://Moneycontrol
