We wrote in the morning a full take down of the entire real estate sector. Let me do a short thread.
1- Prices of houses are falling, developers will find it difficult to sell under construction property because noone would want to lock their capital.
(Cont)

2. with job loses, salary cuts, no visibility of any clear future over the next six months, it is quite difficult for anyone to book houses. The sales numbers that are being peddled around is highly questionable & we have to wait for Rera data for the same. (Cont)

3. Construction workers are going home & ideally they go back for Kharif season but it is highly unlikely they will come back by Dec 2020 or Feb 2021. Most workers will wait for things to improve/ toil their land/ find MNREGA jobs. Construction is done for for most part. (Cont)

4. Financial Closure- Except for top three listed developers most developers have a gearing of over 1.2x how will they pay back their loans is a question best answered by them. Interest cost for most guys have gone up since Sep 2018, banks are staring at impairments. (Cont)

5. There are very few REPE funds left in resi most have moved to commercial and Retail. Let’s deal with them. Retailers and Mall owners are dependent on each other. Force Majuere sounds nice to speak but far from reality. Why? Because the mall developer has LRD. He has to pay.

This to co exist retailers need to pay something too. Problem is they work on thin margins and with negligible sales it is a question who is going to pay whom and how? In the end, banks will see problem loans. (Cont)

7. The commercial landlords. While Dollar to INR looks good, but the problem is noone wants to spend anything. Most Indian startups are letting go people who acquire fancy office spaces. In its worst year India leased 20msf new leases in 2009, what will happen in 2020? (Cont)

8. Finally- the point is RBI has to wake up to the fact that moratorium on loans is too little. There will be bloodbath in the banking sector. And this time, noone knows who will be bailing out whom in which format. The SBI govt AIF is a lazy fund. People need to wake up.