Way Out!

How the loan scam discovery will shape up the realty market in the future, will it be a win-win proposition in the market and how the common man should read in between the lines; these are some of the apprehension which can’t be answered in a very immediate term instead one has to wait and watch to see the market reacting.

The loan scam was busted with the allegation that few private institutes have benefited some real-estate players by compromising stringent procedure of funding and providing funding to real-estate players in return of monetary benefits. The day since this loan scam was busted the stocks of funding companies whose names was involved in the scam and the real estate player are bleeding. Stocks even breached there year low’s since the discovery came to the light.

Well there is mixed reaction from the market regarding property prices projections for days to come. With every passing day new names and new ways of misappropriation are getting exposed including writing off of bad debts and malpractices. I anticipate some new imposition from government in a very immediate term, to curb malpractices in future transactions. This will lead to tougher financing guidelines resulting liquidity crunch to real estate developers which in turn will slowdown there upcoming projects.

It is also learnt that Real estate developers are having an outstanding obligations tuning to 25,000 Crore rupees to honor, for which they can’t look back at market. Tough time for real estate companies doesn’t ends here, the Public offers which were in the pipeline to hit the market are taken a back as there is a subdued interest on investor in real estate stocks post scam, Investors are in a pause mode and it seems that real estate sector has suddenly lost its shine.

In this entire development the developers are bleeding and to honor there existing obligation they may take a decision of reducing the price for there completed and upcoming projects as well

On the same time projects with clean image will beg a premium for there upcoming and completed projects, scarcity of the new projects and premium from these developers will push the prices.

In nutshell how the market will react to this development is not very certain and if you are thinking for a dream house of yours I will suggest you to watch the situation and then take an informed decision.

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