Fitch Ratings said the short-term outlook for India's real estate sector is negative with slowing demand and growing liquidity concerns, coupled with the tightening bias of monetary policy, leading to a possible negative impact on the credit profiles of real estate companies. But in Fitch's opinion, this slowdown will also aid the process of weeding out some of the weaker entities within the sector, and increasing the relative strength of some of the larger, more established developers. The rating agency, however, warned that the liquidity risks on account of significant bullet repayments falling due during the course of 2008 remain a key challenge across the board. Larger, established and well-capitalized companies with access to banks/financial institutions would remain better positioned to manage this risk, while smaller players may end up either refinancing these at materially high rates of interest, or could default on their obligations, it said.