Realty sector performance to be affected this year so avoid investment in reallity stocks.
Few things to affected realty sector in 2011
1.Cost increase in raw material and labour cost to affect profit margin of realty company ,if we compare price of steel,cement and bricks which is main object used to build more then 20 rise since two-three years impact high cost for buildings.
2.After implementation of 9th planning commission recommendation to higher salary in public service and NAREGA gave more employment so low labour availability also hike in labour price by 30-40 % also impact cost in building.
3.Due to high inflation step taken by RBI impact rise in interest affected buyers to avoid purchasing realty so demand will be less.
4. Interest rates hike also affect a higher interest burden on realty company in trouble
5. Last five year rise in property price also affect in demand due to high cost and builder to start new projects
So outlook for realty company in 2011 is better to avoid to invest in such sector
Few things to affected realty sector in 2011
1.Cost increase in raw material and labour cost to affect profit margin of realty company ,if we compare price of steel,cement and bricks which is main object used to build more then 20 rise since two-three years impact high cost for buildings.
2.After implementation of 9th planning commission recommendation to higher salary in public service and NAREGA gave more employment so low labour availability also hike in labour price by 30-40 % also impact cost in building.
3.Due to high inflation step taken by RBI impact rise in interest affected buyers to avoid purchasing realty so demand will be less.
4. Interest rates hike also affect a higher interest burden on realty company in trouble
5. Last five year rise in property price also affect in demand due to high cost and builder to start new projects
So outlook for realty company in 2011 is better to avoid to invest in such sector
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