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Builders Seek Support From RBI To Deal With 2nd Wave Of COVID
CREDAI urges and expects that similar measures which shall address concerns of large businesses and labor-intensive sectors like Real Estate will be announced in days to come
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Realtors apex bodies CREDAI and Naredco have demanded that the RBI should consider allowing loan restructuring, interest moratorium, and additional liquidity support for the real estate sector.
They welcomed the various steps taken by the RBI on Wednesday such as allowing certain individual and small borrowers more time to repay debt and permitting banks to give priority loans to vaccine makers, hospitals, and COVID-related health infrastructure.
However, the two associations as well as property developers and consultants urged the RBI to announce measures to support the realty sector in dealing with the second wave of the COVID-19 pandemic.
Housing sales plunged by 40-50 per cent during 2020 because of the COVID-19 pandemic. The revival in demand, witnessed from October last year, received a major setback with an outbreak of the second wave in late March of this year.
'CREDAI urges and expects that similar measures which shall address concerns of large businesses and labor-intensive sectors like Real Estate will be announced in days to come,' CREDAI National President Harsh Vardhan Patodia said in a statement.
He demanded that the RBI should make accounts that are classified as SMA 1 and SMA 2 eligible for restructuring and interest moratorium.
Patodia said additional liquidity should be provided for the development of real estate projects.
'The aftereffect of the second wave will last for a much longer period because of the exponentially large number of infections and deaths and the true impact is yet to be assessed. Hence, proactive measures, much larger than those announced during the first wave of the pandemic last year, are the need of the hour,' he said.
Naredco President Niranjan Hiranandani hoped that the RBI will also consider industries like real estate, which need similar support during these challenging times.
'We look forward to actions that are sequenced, calibrated, and well-timed so as to reach out to industries like real estate,” he added.
Anshuman Magazine, Chairman and Chief Executive Officer, India, South-East Asia, Middle East & Africa, CBRE, termed the announcement of a restructuring of loans for small borrowers as a proactive move, which would prevent asset downgrade and also provide relief to lenders. Dhruv Agarwala, Group Chief Executive Officer, Housing.com, Makaan.com and Proptiger.com, said the real estate sector was anticipating steps such as assistance in loan restructuring and a moratorium to help it get through these difficult times.
'In its next announcement, the RBI should take into consideration the needs of the real estate sector,' he added.
Anarock chairman Anuj Puri said, the RBI's decision to allow loan restructuring for individuals and MSMEs (Micro, Small & Medium Enterprises) hit by the second COVID-19 wave will help prevent home loan defaults.
'That said, for the housing sector to do well it is imperative for the RBI to maintain the lower home loan interest regime in the near future as well. This will benefit home buyers and thus the real estate sector because lower rates were one of the major driving factors for increased housing sales in the last year,' he added.
Amit Modi, Director ABA CORP and President-Elect CREDAI Western UP, hopes that the sector will be given due consideration in the next round of announcements.
Honeyy Katiyal, Founder of Investors Clinic, said the real estate sector too needs a sentimental boost to keep up with the business momentum.