A glimmer of hope for stranded homebuyers

Stress fund can be enhanced to benefit more projects, should include those in NCLT, NPA, say realtors

Finance Minister Nirmala Sitharaman’s announcements for real estate is expected to provide the much-needed boost to the sector, and enable homebuyers get possession of their incomplete homes currently stuck in stalled projects due to want of funds.

“All that the Finance Minister announced would be a big gamechanger not only for the real estate sector, but also for the revival of the economy as a whole. Housing is one sector wherein if one rupee is spent, 42 paise comes to GDP growth directly. So, the announced measures will bring in great economic growth for the country,” said M. Murali, CMD, Shriram Properties Ltd.

“All are outstanding steps and make a big difference. The provision for ECB funding will help in attracting big capital which is waiting outside the country. The impact will be seen in the fourth quarter and I will not be surprised if the GDP in the fourth quarter will grow at 8-9% as an outcome of all the measures announced by her,” Mr. Murali said.

Chintan Sheth, director, Ashwin Sheth Group, said: “The announcements are some of the measures required to ensure flow of liquidity into the sector as it would address certain challenges being faced by the real estate sector. However, we look forward from the government on addressing concerns related to demand creation.” Developers’ body NAREDCO said the stress fund amount should have been enhanced to benefit more projects.

“For delayed and stalled projects, for example in the NCR, this will be a major problem, given that most of such projects are under NCLT and NPA, and will not get the benefit of this stress fund. This announcement will not solve the problem of delayed/ stalled projects and affected homeseekers in locations like the NCR,” said Niranjan Hiranandani, national president, NAREDCO.

He said since the last-mile funding had been envisaged for affordable and MIG homes, the definition of affordable housing needed to change from the price tag of ₹45 lakh to ₹1 crore, as the current definition made no sense for the projects in Delhi, Mumbai and Chennai.

“The creation of a special window to provide last-mile funding requirements for housing projects that are non-NPA and non-NCLT and yet are stuck due to lack of funding, is a major boost to the housing sector [affordable and mid segment] and a perfect festive treat for lakhs of homebuyers who have been anxiously waiting for their prized possessions,” said Anuj Puri, chairman, Anarock Property Consultants.

Shishir Baijal, chairman and managing director, Knight Frank India, said the announcements were once again in the right direction and would address some of the many challenges faced by the real estate sector. “While we welcome these changes, we feel these do not sufficiently address the issues of the sector in terms of continued slowsales and low demand.

“The larger issue of demand creation has not been addressed in any way and form [part] in these announcements. We will have to await the results of the measures and targeted relief announced other sectors such as auto, manufacturing etc. to see how the economy is revived, leading to stability and growth in demand,” Mr. Baijal said.

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