Staring at bleak demand post lockdown, real estate industry welcomes RBI move to improve liquidity - Hindustan Times

Staring at bleak demand post lockdown, real estate industry welcomes RBI move to improve liquidity

By, Gurugram
Apr 17, 2020 10:48 PM IST

While a nationwide survey of the real estate industry shows that the lockdown, announced to contain the spread of coronavirus disease (Covid-19), shows that business sentiment is at its lowest, the industry and all stakeholders have welcomed the measures announced by the Reserve Bank of India (RBI) on Friday.

HT Image
HT Image

The report released by Knight Frank, Federation of Indian Chambers of Commerce & Industry and National Real Estate Development Council, on Thursday showed that as per 60% stakeholders the Covid-19 global crisis will adversely impact residential new launches (65%), will significantly impact sales (65%) and prices (64%) in the next six months.

The report stated that the residential sector, which was already experiencing weak demand, will find it difficult to complete the ongoing ones due to construction halts and labour shortage, and launch new projects.

Looming uncertainty has adversely impacted the stakeholder sentiments for the coming six months, it said, adding that the lockdown will translate into a vicious sequence of stalled construction, delays in project deliveries, delays in loan repayments and debt servicing to banks and an overall slump in demand due to uncertainties in employment and salary cuts. “All these factors have marred the future sentiment score of stakeholders,” it added.

Sentiments of the financial institutions have also become pessimistic.

Shishir Baijal, chairman and managing director of Knight Frank India, said, “The pandemic has created an unprecedented condition which is impacting global markets and societies. There is already a severe shortage of liquidity due to the complete standstill that most economies have come to. Managing liquidity and sustaining through the length of this pandemic will be critical for economic survival in the post-pandemic era.”

However, the move by the RBI to reduce the reverse Repo rate on Friday has sent some positive signals to the realtors and consultants.

Anshuman Magazine, chairman and CEO, CBRE said, “RBI’s recently announced liquidity measures are a clear step towards encouraging liquidity in the banking system. To further ease flow of funds to the housing sector, the National Housing Bank (NHB) has also been provided with a refinance facility of 10,000 cr for housing finance companies as additional liquidity for individual housing loans, which is a much-needed boost at this time.”

Jones Lang Laselle (JLL), a real estate consultancy major, said the relaxation of NPA classification norms and extension of one year for commencement of projects to real estate developers by NBFCs will provide relief. “The refinance facility to the extent of 10,000 crore to NHB is a welcome move to provide the much needed liquidity to housing finance companies,” said Ramesh Nair, CEO and country head, JLL India.

Gurugram-based developers also welcomed the move and said that despite the negative sentiment, the RBI move will help.

Pradeep Aggarwal, founder and chairman, Signature Developers said, “The RBI has addressed the concerns of realty sector too, which is a clear indication that the government understands the importance of the second largest employer in India. All the economic machinery has to work together to make sure the country comes out of this economic downturn as soon as possible.”

Catch every big hit, every wicket with Crickit, a one stop destination for Live Scores, Match Stats, Infographics & much more. Explore now!.

Stay updated with all the Breaking News and Latest News from Mumbai. Click here for comprehensive coverage of top Cities including Bengaluru, Delhi, Hyderabad, and more across India along with Stay informed on the latest happenings in World News.
Story Saved
Live Score
Saved Articles
My Reads
Sign out
New Delhi 0C
Tuesday, July 23, 2024
Start 14 Days Free Trial Subscribe Now
Follow Us On