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According to Fitch, the property market will improve by March 2016

The global rating agency, Fitch on Monday said that there is likely to come an upturn in the county’s investment climate and the reduced interest rates will improve the property market by the end of March 2016.

“The property development sector (will) be a key beneficiary of reductions in housing loan interest rates by several domestic banks in April 2015,” the agency said, and added that they would also boost credit growth.

“We expect property developers with a greater exposure to the middle and lower income segments to benefit more from lower domestic interest rates,” it said.

Fitch has observed that “the process of reducing leverage (debts) stalled in 2014 due to weak sales and slower cash collections on properties that were sold towards the end of 2014 and in early 2015, as developers introduced easy payment schemes to stoke demand.”

Fitch has estimated that around 20% of the sector’s sales in the last two fiscal quarter were financed by easy payment plans and observed “the longer cash collection cycle will continue to weigh on developers’ balance sheets in the near term.”

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