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Realty players welcome RBI's additional Rs 5,000 crore fund infusion, seek more support

The additional funding will ease the cashflow burden, improving the market performance, Anshuman Magazine, Chairman & CEO - India, South East Asia, Middle East & Africa, CBRE, said.

Published: 06th August 2020 11:04 PM  |   Last Updated: 06th August 2020 11:17 PM   |  A+A-

Hit hard by Covid-19, housing sales between April-June in India's top 7 cities fell by 81%

Express News Service

NEW DELHI: To increase liquidity in the housing sector, the Reserve Bank of India (RBI) on Thursday decided to allocate an additional Rs 5,000 crore to the National Housing Bank (NHB). Besides this, the Central Bank's loan resolution plan and unchanged repo rate was widely welcomed by reality players even as they wanted an additional cut and extension on loan moratorium.

Anuj Puri, Chairman – ANAROCK Property Consultants,  said that the allotment of Rs 5,000 crore each to National Housing Bank and NABARD is a much-needed step for sectors including real estate reeling under the liquidity crisis. "It will help infuse capital into the HFCs and eventually provide relief to developers battling liquidity issues in COVID-19 times," Puri said. Anshuman Magazine, Chairman & CEO - India, South East Asia, Middle East & Africa, CBRE, said the additional funding will ease the cashflow burden, improving the overall sentiments and market performance.

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Shishir Baijal, Chairman & Managing Director, Knight Frank India, said that the loan resolution plan, which allows for payment moratorium up to 2 years, for corporate and personal borrowers should provide a breather to stressed real estate developers and individual borrowers in the housing segment alike.

"While the sector was looking at a further revision in the policy rate to boost demand, we appreciate the accommodative stance by the RBI, in the wake of the high rate of inflation which may have necessitated keeping policy rates unchanged.  The Governor revealed that real GDP of India will trend in the negative territory for the majority of FY 20 – 21, which causes concern for the real estate sector as economic growth and stability is a key ingredient for its long-term growth," Baijal said.

The industry, like many others, was expecting an extension of loan moratorium which is ending on August 31. The RBI, however, decided to favour the banks and did not announce an extension as such.

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"An extension in the Loan moratorium would have helped lower and middle-income groups to better manage their finances. Growth recovery in rural areas has been robust as per RBI's estimates, would expect a similar recovery Pan-India," said Manju Yagnik, Vice Chairperson, Nahar Group, and Vice President NAREDCO (Maharashtra).

Surendra Hiranandani, Chairman and Managing Director, House of Hiranandani, said that going forward, the real estate sector requires additional support at this stage as it can act as a catalyst in resurrecting the economy, backed by stringent fiscal and non-fiscal measures.

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"Furthermore serious and effective steps are required to be taken to boost the demand side of the economy and spur consumption which we hope will happen soon. We need to drastically and aggressively lower interest rates to kick start the economy. We hope the RBI will continue to take positive steps for the economy at large, and make it enticing for home buyers," Hiranandani said.

Hit hard by Covid-19 pandemic and the subsequent lockdown, housing sales between April-June (Q2 2020) in India's top 7 cities fell by 81 per cent to just 12,720 units in Q2 2020 as against 68,600 units in Q2 2019, a report by Anarock said. New launches fell by 98 per cent y-o-y during the period.


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