Bagga negative on real estate space

Excerpts from Closing Bell on CNBC-TV18 Watch the full show » Nifty BSE | NSE 08/02/12 Are Mutual Funds betting on Nifty?

Ajay Bagga , Head of Private Wealth Management, India-Deutsche Bank is negative on real estate space.

Bagga told CNBC-TV18, "I would be more negative on real estate; I think there is pain left. If you look at companies there is a still huge amount of leverage. What is happening is there is liquidity in the market. If you look at banks, they are putting Rs 25,000-30,000 crore a day in reverse repo at 3.5%. So there is liquidity around even with households but there is no credit flow and there is no investment flow that is happening especially into real estate."

He further added, "The public sentiment is that wait a bit and you will see lower prices. That is what is hurting the space. Residential is quite dormant, commercial also there is a question. Demand having gone down, there is demand impact as well as an over supply coming through. Even hospitality is hit with a reduction of tourism globally, which is impacting India both the business traveler as well as the leisure traveler. So all the verticals including retail are suffering right now, so I would say it's early in the day to call it a bottom in the real estate pack. I think we might see some more selling and some more pain. One could get a better level going ahead."

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