Affordable housing - Gripped by Fear of Excess

PropEquity research data highlights that developers who had hurried into this segment, to improve their cash flows at a time when high-end residential segment was suffering, are sitting with >40% unsold stock. Of ~0.1mn units that were launched between Nov08-Oct09, only 57% found buyers.

Already seems to be a crowded space; we believe this segment will always remain price sensitive and any steep price hikes will kill absorption, especially as competition is stepping up.

As many as 11 realty companies have filed their DRHPs with SEBI (of which three have filed in the last week) looking to garner ~Rs 190bn (US$4.1bn) from the primary markets.

The real problem is Market has not improved fully and Developers have to tone down their expectations.