A fear has set in among property investors who are offloading their apartments at a discounted rate from what builders are quoting. With property prices in correction mode, do private equity players think that it is the right time to strike deals in India?
The tide in the real estate market has turned. Investors and speculators who lapped up property during the boom are now getting the jitters in a cooling market.
They are offloading stock at as much as 25% lower than what builders are offering buyers. So if you want to buy property today, you may do well to pick up a flat on re-sale with a sizeable discount.
Falling property prices could also spur bigger investments from global private equity players. The next few months will see more private equity deals being struck in Indian real estate than ever before. Developers are bringing their valuations down to reasonable levels as other sources of funding dry up.
However, private equity funds do feel the heat as they come under pressure to deploy funds after raising big bucks from their investors last year.
As a result, developers increasingly see value in roping in a private equity partner. Private equity may become the most preferred source of capital in the long term.
Source : MoneyControl