CURRENT POSITION OF THE REAL ESTATE SECTOR
Submitted by :_ subimitted to:- Name : unknown Mss.Parmeet Kaur. Course:MBA(IT).
* Current scenario of Real Estate.
* Characteristics of the Real Estate Industry.
* Demand for the sector.
* Driving forces responsible for growth.
* Real Estate Investment banking
* Real Estate consultants.
* Developers and Construction Companies.
* Domestic Corporate Houses.
* Real Estate and Financing Trends in India.
* Risks involved in the Real Estate Investment Market.
* Opportunities and challenges.
Definition:- Land plus anything permanently fixed to it, including buildings, sheds and other items attached to the structure. Although, media often refers to the "real estate market" from the perspective of residential living, real estate can be grouped into three broad categories based on its use: residential, commercial and industrial. Examples of real estate include undeveloped land, houses, condominiums, townhomes, office buildings, retail store buildings and factories.
Real estate sector is in boom in India. In the last fifteen years, post liberalization of the economy, Indian real estate business has taken an upturn and is expected to grow from the current USD 14 billion to a USD 102 billion in the next 10 years. This growth can be attributed to favorable demographics, increasing purchasing power, existence of customer friendly banks & housing finance companies, professionalism in real estate and favorable reforms initiated by the government to attract Global investors.
The real estate sector has witnessed a strong bull run over the last few years starting2004, before plunging in second half of 2008. With the rapid economic growth in the country, the income and surpluses in the hands of the people suddenly increased. Real estate being one of the only two perennial & traditionally preferred asset class and with the inborn desire of Indians to own a house, the sector became a natural choice for these excesses to be invested. This sudden spurt in demand caught the fancy of investors globally. Real estate sector was one of the key beneficiaries of the foreign fund inflows or hot money. However with the global crisis in 2008, this very fact went against the sector.Also, the crisis had its genesis in real estate sector and as took a steep plunge across all the countries, including India, even though India’s real estate market was safe and didn’t face proportional impact. The sudden disappearance of the liquidity and the fear in investor’s minds resulted in steep fall in demand. Real estate companies in India which had taken huge leveraged positions for expansion in anticipation of booming demand saw their market cap erode quickly and had to hold projects due to negative cash flows. The share price unjustified levels even though the long term fundamentals of the Indian real estate sector haven’t changed. While economic growth returned and the markets improved by 2009, rationality has not come back to the real estate stocks. Though other sector indices have appreciated many folds over the past one year, the BSE realty index continues to underperform the broader market by a wide margin. This despite the fact that property prices are almost nearing and in fact even crossed their 2008 peaks in most places. Further demand has returned to the sector now and projects are being sold out within days of their launch. It is encouraging to know the premium housing is growing fast. Most...