NBFC crises hit sales and launches of cheap homes across Mumbai
The affordable housing sector in Mumbai seems to have been hit by the non-banking financial companies (NBFC) crises, as it has adversely affected new launches and sales in the second quarter of the year.
The study was conducted by Liases Foras, a real estate research firm, which designated houses of less than ₹50 lakh as affordable houses. The study pointed to a significant drop in new launches of affordable houses to 9,034 houses in the April to June quarter, as opposed to 13,283 between January and March. Similarly, sales of affordable houses have dropped to 7,332 houses in April to June from 7,380 houses in January and March.
According to Pankaj Kapoor, CEO, Liases Foras, “NBFCs had a strong presence in areas like Karjat, Badlapur, Neral, Shahpur and Uran, where we are seeing a huge supply of affordable houses. Owing to this crisis, builders and buyers were adversely affected,” said Kapoor, adding that homebuyers are the worst affected as NBFCs were flexible in offering loans, unlike banks.
Rajesh Vardhan, managing director, Vardhman Group, said the NBFC crises had “wrecked havoc” on the real estate sector. “Currently, builders are not even getting construction loans which were approved by the NBFCs,” he said.
In addition, the government banned subvention scheme where builders used to pay home loan interest of buyers till a specific time, usually till the buyer gets possession. “This has again affected the homebuyers as the homebuyer was not burdened with his rents as well as EMIs,” said Kapoor. The NBFC crises started in September last year owing to alleged financial irregularities of the IL&FS group after some of the group’s companies defaulted on loans.
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