RBI which was strongly opposing the flawed SEZ policy in India had raised interest rates for the Real Estate Sector. RBI has also asked Banks to do higher provisions for their exposure to Real Estate loans. Greedy property developers are passing the loan burden on to consumers. However, with banks raising interest rates on home loans as well, Real Estate Property developers may have been trapped.
Observing the recent trend in realty stocks in India, it makes me wonder if a larger correction has begun. This shakeout will last longer and weak players will be eliminated. If you are planning to BUY a house, just hold with your cash for 3 more months and you will get it 20% cheaper :-)
