The Union Cabinet’s approval for a special window for funding of stalled affordable and middle-income housing projects are expected to give relief to a total of 5.76 lakh units (launched in 2013 or before) in the top seven cities.

As per Anarock Consultants data: In Bengaluru total delayed are 39,000 units (approx value of projects running behind schedule ₹28,000 crore), Chennai 10,000 units (₹6,500 crore), Hyderabad 8,900 units (₹5,500 crore), Kolkata 13,000 units (₹7,300 crore), MMR 2.10 lakh units (₹2.34 lakh crore), NCR 2 lakh units (₹1.26 lakh crore) and Pune 95,000 units (₹57,000 crore).

Read more: Centre to open ₹25,000-crore window for stalled realty projects

“This move couldn’t have come at a better time because the delay was causing serious apprehensions. The delay in the on-ground deployment of the stress fund gave rise to severe apprehensions about the main issues – that of stuck and delayed projects – that had remained unaddressed so far. The timeline for setting up this fund and its actual implementation is quite critical,” said Anuj Puri, Chairman – Anarock Property Consultants.

He further said “the special window will get investments from institutions like LIC, SBI and others which will take the corpus to nearly ₹25,000 crore. The fund will also be open to other sovereign funds to add to the corpus. More importantly, several NPA projects and those facing bankruptcy proceedings under NCLT shall also be included provided they are not referred for liquidation. This will bring in even more stalled projects into the eligibility criteria and give relief to more aggrieved homebuyers.”

Ramesh Nair CEO & Country Head JLL India said: “The Cabinet’s decision is expected to give relief to stalled affordable and middle-income housing projects and enable homebuyers to get delivery of homes locked in stalled housing projects is an extremely positive move.”

“This move by the Finance Minister is likely to become a game-changer as it now includes projects, which are NPA or are under NCLT, a major pain point that was left unaddressed in the last announcement. This will be a respite to homebuyers, whose dream of owning their own house have been long shattered owing to uncertainties in project deliveries. At the same time, it protects the interests of the private investors who are expected to contribute nearly 60 per cent to this proposed fund. Stringent criteria concerning projects being net worth positive, registration with RERA, an appraisal by investment committee will ensure safety and protection of commercial returns for the investors.”

Reacting to the Union Cabinet’s move Dr. Niranjan Hiranandani, President (National), NAREDCO and MD, Hiranandani Group said “The vexed problem of delayed and stalled real estate projects appears to have found a solution, with the Finance Minister announcing Cabinet Approval of the scheme to provide ‘last mile funding’ for such projects, which she had proposed earlier. The funds will be used to provide priority debt financing for the completion of stalled housing projects in the Affordable and Middle-Income Housing sector, providing relief to developers with unfinished projects as also ensuring delivery of homes to buyers.”

“The fund will help nearly 1,600 stalled housing projects in the country, and it is positive that the aspect of NCLT/ NPA will not be a stumbling block to prevent stalled and delayed projects from approaching the fund,” he added.

Sharad Mittal, CEO & Head, Motilal Oswal Real Estate Funds said: “It's a positive move for the liquidity starved real estate sector ₹25,000 crore will be a good amount to address the chronic situations. Though one needs to see the modalities on implementation, time is of the essence in delayed projects.”

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