The real estate market has shrunk owing to the demand slowdown, however, certain big players are continuing to do well, said Vikas Chimakurthy, CEO of Kotak Realty Fund on Wednesday.
"We still believe that there is a pain in the luxury as well as the premium segment at this point of time, though some people are doing well,” said Chimakurthy in an interview with CNBC-TV18.
Some green shoots are appearing in the real estate sector after realty major DLF sold 376 ready-to-move-in luxury flats worth Rs 700 crore on the first day of the launch of its new housing project in Gurugram. Even as the overall property market is facing a demand slowdown, DLF has seen good demand.
Chimakurthy, along with Mohit Soni, associate director of corporate ratings for Fitch Ratings, discussed with CNBC-TV18 the way forward.
“As far as DLF sales are concerned... it is a completed project from a fairly large reputable developer. That kind of a project doing well is not a surprise because under-construction properties have anyway been out of favour given the kind of delays and the number of projects which have been stuck over the last many years," said Soni.
In terms of liquidity risk for developers, Soni added, “If you compare to last six-eight months, definitely there have been certain steps which have been taken by the government... but I think the issue has not been addressed adequately enough. Basically for real estate, the biggest challenge that has surfaced in the last one year is the credit availability from your conventional sources of funding both banks and non-banking financial services (NBFCs)."
“The problem is lack of confidence with customers, and they don’t know if they buy a project, whether that will get completed because current capital providers are not in a position to give liquidity. As long as these things are done and confidence is given to the last mile capital providers to complete the project, there is enough capital to come in,” said Chimakurthy.