SEVERE CASH CRUNCH IN THE REAL ESTATE SECTOR

By
Real Estate Agent with R.B.Eeal Estate

The recent bloodbath in the real estate sector has started taking a toll. Almost all large developers are facing a severe cash crunch and finding it difficult to complete their ongoing projects. The situation is so bad that most of them have reported a 50-70% cash shortfall. Liquidity crunch has forced many developers to pick up cash from the unorganized market at interest rates as high as 35% to 50% annually. The lending rate of banks is between 18% and 20%. The grade A developers which are facing crash crunch include DLF, MGF Emaar, Shobha Developers, Unitech, Omaxe, Parsvnath Developers, Hiranandani Group, Ansal API, BPTP Developers and TDI Group.

 

                                                                Courtesy: ET dtd. 20/06/08

Comments (4)

Bill C. Merrell
Merrell Institute ~ Appraisal Education Network - Bohemia, NY
Ph.D. - Merrell Institue

I agree- Cash is at a premium- One reason in our area has alot to do with the many sub-prime lenders closing-

There still is credit card money flowing- don't know why that's still popular- I guess because people meed money.

Great blog post- All the best- Keep up the good work.

Bill

Jun 22, 2008 05:32 PM
Robert Machado
HomePointe Property Management, CRMC - Sacramento, CA
CPM MPM - Property Manager and Property Management

Until the foreclosed homes clear out, the new ones will have to wait.

Jun 22, 2008 05:50 PM
Anonymous
BillC. Merrell

Hi Bill

Thanks to see my blog &  for your nice comment.

But some member of activerain dosn't like it.

Thanks for like it.

Jun 22, 2008 07:32 PM
#3
Chip Jefferson
Gibbs Realty and Auction Company - Columbia, SC

Permits a re way down across the nation. The end user mortgage money is also at a pretty severe cash crunch as well. Its really a mess.

Jun 22, 2008 10:50 PM