NEW DELHI: Despite a strong push by the government, realty lending by financial institutions dropped sharply over the past one year, due the impact of the lockdown imposed to contain the Covid-19 pandemic.
According to data analytics firm Propstack, for the first nine-month period of 2020, the decline in real estate wholesale lending for both residential and commercial real estate projects was lower by almost 35 per cent year-on-year.
The report pointed out that in the last fiscal year( 2019-20) the number of loans sanctioned stood at 641 for an amount of around Rs1.27 lakh crore and those for the nine-month period this year stood at 366, worth Rs 78,315 crore.
The study also noted that there was a decline of one per cent in interest rates for term loans or construction finance, while interest rates were down by 0.8 per cent on loans taken through debentures and 0.5 per cent through lease rental discounting. The overall decline stood at 0.6 per cent, it added.
The study also said that there has been a 35 per cent pick up in the number of loans sanctioned to developers in the third quarter this year on the back of lower interest rates and stamp duty reduction, not to mention the offers doled out by developers during the festive season.
According to the report, lending rates have also come down by about 100 basis points for term loans in the past one year and by a lower extent for other loans. The report said that data analytics for the survey was done after considering loans sanctioned to over 1,000 developers and their projects based on their filing with ministry of corporate affairs (MCA).
In another report released before the festive season, Propstack had said despite the pandemic, real estate sales in Mumbai have grown by almost 35 per cent year-on-year.