EBM News
EBM News

Realty demand likely to plunge 50-70% in FY21

NEW DELHI: The already languishing residential real estate demand is expected to plunge 50-70 per cent year-on-year in the financial year 2020-21, according to Crisil. According to the domestic rating agency, the sector will see survival of the fittest as small and mid-sized developers are staring at a huge funding gap. As a result, the credit profiles of the small developers will be impacted than larger developers with healthy balance sheets.

“Lowering capital values and attractive interest rates augurs well for affordability which has improved by 10-30 per cent across cities during the past five years. Despite improved affordability, demand translation will be feeble led by income uncertainty arising from pandemic coupled with weak investor sentiment emanating from pressure on capital appreciation / rental yields in the sector over past few years,” said Isha Chaudhary, Director, Crisil Research. Small-to-mid-sized players could face a sharp 200 per cent rise in funding gap this fiscal. Many may also look for tie-ups with bigger firms.