Real estate players rebuild on rising residential demand, falling interest costs
Chennai: Real estate developers showed signs of bouncing back in 2012-13 after a difficult 2011-12. Financials of nine leading listed players showed a 25 per cent revenue growth and a healthy 27 per cent growth in aggregate net profits.
Completion of a larger number of residential projects, even as the commercial segment remained lacklustre helped most players report higher sales and profits.
Across the country, regions that have seen sharp price correction in recent years such as Bangalore saw strong pickup in demand for residential housing as buyers cashed in on affordable prices.
National Housing Board’s Residex index showed that prices in the Bangalore market are on the rise, in the last three quarters. Mumbai and NCR also recorded higher prices according to the NHB index, but demand remained subdued.
Growing debt and stretched finances on account of interest payments have dogged many real estate players in recent years, but the problems now seem to be abating. Debt levels stabilised and most builders showed interest expenses tapering off towards the year-end. In the first quarter of FY13, interest expense increased by over 23 per cent on aggregate, over the same period the previous year.