Corona virus proliferation has further delayed a recovery that may be due to measures
launched to revive various government demands, however, it does not appear that
prices will fall immediately. Niranjan
Hiranandani, national president, NAREDCO,
says that "reviving Indian realty is the second largest employment
generator, not only from the point of view of GDP growth, but also for job
creation as the multiplier effect of more than 250 affiliated industries in the
region is.
Recently,
the Center announced more tax breaks and lower interest rates on home loans to
make purchases more attractive, besides setting up Rs 25,000 crore stress fund
for speculation.
He
called for a slowdown in the residential segment, which has already stalled
housing sales, project launches and price increases in India's residential
realty sector, which is under pressure due to mega regulatory changes due to
Real Estate Regulatory Authority (RERA), Goods and Services Tax (GST), Demonetization
and Benami Property Law.
According
to rating agency ICRA, the epidemic, if not soon included, will not only
significantly affect the economy, but will adversely affect the cash flow and
project delivery capabilities of developers.
"Although
in the case of a prolonged outbreak, the impact on overall economic activity is
likely to be deeper and more sustained, resulting in a more significant impact
on developer cash flow and project execution capabilities, leading to a wider
credit negative impact." ICRA said in a recent note that the three-month
deferment announced by the RBI on loan on March 28 would provide some comfort
to the builders.
“The
injected liquidity of Rs 3.74 lakh crore (by RBI) with a three-month moratorium
on all loans by financial institutions will ease short-term liquidity concerns
and help developers as well as homebuyers. It is a great relief for developers
and buyers to help ease the challenges they currently face,” says Ramesh Nair,
CEO and Country Head of JLL India.
Anticipating
the delay in completion of the project and supporting the builder community,
the Real Estate Regulatory Authority in Maharashtra has announced a 3-month
extension in the completion deadline of the project.
Recall
here that real estate developers in Mumbai, the state capital and India's
financial nerve center, have the largest selling stock in the top nine markets.
“Due
to the 21-day lockdown outbreak of COVID-19, both manufacturing and sales
activity has come to a complete halt in the entire real estate sector. At many
sites, construction workers have also moved back to their hometowns. Even after
the lockdown, the activity will only recommend slowly, which will cause project
delays anywhere between at least 4 to 6 months,” said Sharad Mittal, CEO and
head, Motilal Oswal Real Estate Funds. Welcoming the announcement of Maharera,
Mittal said that although it cannot fully compensate the sector with actual
project delays that are likely to be direct, 'it is certainly a decision in the
right direction, to support real estate developers and the region. Overall in
this global crisis.
