With a massive amount of inventory remains unsold amid an ongoing slowdown in the real estate sector, not many lenders are willing to lend fresh money to the developers, a veteran banker said.
With a massive amount of inventory remains unsold amid an ongoing slowdown in the real estate sector, not many lenders are willing to lend fresh money to the developers, a veteran banker said. So, there is a need to support the realty developers as without them there would be no supply, Deepak Parekh, Chairman of Housing Development Finance Corporation (HDFC) told CNBC TV18 in an interview. Adding, he said that the regulators have to be slightly different in calculating non-performing assets (NPAs) in the realty sector. The bad loans in the real estate can’t be compared to any other business, he added.
Even as luxury housing remains under stress, commercial real estate is booming, he added. The demand for IT back offices is high, he noted. In addition, the affordable housing by quality developers is also seeing huge interest, Deepak Parekh also said. The affordable housing will remain the dominant segment in the coming years with a total of 10 million PMAY (U) units to be delivered by 2020 itself, a recent CREDAI-CBRE report showed.
Meanwhile, the supply of luxury housing priced over Rs 1.5 crore that fell sharply after demonetisation has improved and more than doubled to 16,100 units in the first half of this year across seven cities, property consultant Anarock said in a recent report. The high net worth individuals and non resident Indians are the ones behind rising demand of these luxury flats is now driven by end users. The seven cities which were covered in the survey included Delhi-NCR, Mumbai, Chennai, Kolkata, Bengaluru, Hyderabad and Pune.
“Along with the resale homes market, luxury housing took the hardest hit after demonetization,” Anarock Chairman Anuj Puri had said in a report.