India's real estate story is struggling to survive in the face of bankruptcy and debt default. While all cost heads - land, construction and finance costs shot up in the past 12 years, profit margins have nose-dived from 37 per cent in 2007 to 15 per cent now.Over 93 lakh houses are lying unsold in India's top eight cities, and another 23 lakh are behind schedule.
Most banks stopped lending to developers some years back and NBFCs are pulling away after the IL&FS debacle. The twin shocks of demonetisation and GST introduction also battered this sector. For the once hot housing market, nothing seems to be going right at the moment. It is clear that for the sector to survive, someone will have to take a haircut.