NEW DELHI: The market euphoria over the Rs 25,000 crore package for the realty sector might be short-lived as demand still not picking up and home buyers, as well as developers, looking at loan repayment worth Rs 70,000 crore in the next fiscal.
According to Fitch Rating’s Indian division, about $10 billion of development loans coming up for repayment in the first half of 2020.
According to the Department of Financial Services’ own internal assessment, the amount is in the tune of Rs 1 lakh crore, and it has already flagged its concerns to the government in August this year.
Developers, during their meeting with the finance minister, have already requested to allow one-time debt recast with housing sales almost stagnant.
In this context, experts feel the relief package will not be sufficient to pull the sector out of the slowdown, which is facing multiple blows from RERA, demonetisation, GST and the NBFC crisis and the demand is not likely to revive anytime soon.
“The recovery is not in sight anytime soon due to a severe liquidity crunch on NBFC crisis, and the overall economic slowdown,” said Shishir Baijal, CMD, Knight Frank India.
He, however, expressed hope that as the government is privy of the issue and is taking measures to solve both supplies and demand related issue, this will surely help in boosting the recovery of the sector.
“The package will certainly help the stuck projects but revival of fresh demand still not happening...,” said a senior executive, NAREDCO.