The realty sector, which grew at an amazing 35 per cent last year and was estimated to be worth $15 billion, is in the doldrums. With rising input costs of steel, iron and building material, it has become unviable for builders to construct properties at agreed prices. As a result, there are delays in project completion, leading to financial constraints.
Property prices and rentals are correcting and the stock prices of some of the companies have declined by as much as 75 per cent from their 52-week highs. The Realty Index of the Bombay Stock Exchange has declined over 80 per cent this year. Real estate companies, which have a presence in the index, saw an erosion of about Rs 20,000 crore in market capitalisation.
Text: V.R. Vinod Kumar
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