Realtors welcome govt decisions, seek increased liquidity and easier loans to tide over crisis

Developers in the city, who are struggling to resume construction of real estate projects, on Thursday, hailed the government’s decision to extend timelines for

Developers in the city, who are struggling to resume construction of real estate projects, on Thursday, hailed the government’s decision to extend timelines for projects registered with the Real Estate Regulatory Authority (RERA). However, they said more measures are needed to kick-start the realty sector, which has been struggling for the last few years.

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The lockdown caused by the spread of the coronavirus disease, according to developers, will cause delays in the delivery of projects. They said that revenue has come to a standstill and are apprehensive about the possible cancellation of bookings done in the last six months.

Finance minister Nirmala Sitharaman on Wednesday said that states are being advised to invoke a force majeure clause of the Real Estate (Regulation and Development) Act, so that registration and completion dates of these projects can be extended by six to nine months. The statutory compliances under RERA are also to be extended, she had said.

In view of the multiple problems faced by the sector, realtors in Gurugram want the government to boost liquidity, ensure easier loan terms, extend the payment of dues on account of EDC/IDC by six to nine months and help in restructuring existing loans. At the national level, the industry said they want more sops and tax rebates for homebuyers, and reduction of home loan rates, so that demand for housing rises.

Praveen Jain, the vice-chairman, National Real Estate Development Council (Naredco), said that extension of the deadline of projects for six months is a positive step but cautioned that the industry might spiral if more steps aren’t taken. “The industry is facing fund crunch and this needs to be addressed. We had requested a restructuring of loans and the addition of limits. Also, rescheduling of external development charge (EDC) dues needs to happen,” he said.

Real estate industry body CREDAI expressed hope that measures for infusion of liquidity, decartelisation of cement prices and restoration of the supply chain to ease construction at project sites would be announced soon. “A majority of the construction labour wants to go home, while senior executives from Delhi, Faridabad and Noida are not allowed to come to work as borders are sealed. Unless more steps are taken, the labour present on sites will also vanish and we will be in a very bad situation,” said a developer, who preferred anonymity.

Developers also called for augmentation of rental housing on a large-scale in metro cities of the country. “The government should come out with a comprehensive policy framework for rental housing. It will help in creating a large pool of rental housing, backed by financial institutions, with the help of an adequate policy framework,” said Pankaj Bansal, director, M3M Group.

Despite the difficulties, the developers are optimistic that steps announced by the government, such as the extension of deadline and relief to employees under EPF, will boost sentiment and create a demand.

“The buyers of the affordable category will benefit from government steps, as they will have extra money at their disposal. With extra disposable income, these beneficiaries will go for procuring real estate assets,” said Pradeep Aggarwal, chairman, Signature Global, which deals in affordable housing projects.

“The Central government is announcing relief package for various industries right now. Once this is over, the state government will also come out with its own measures for the industries,” said Amit Arya, media advisor to the Haryana chief minister.