Finance Minister Nirmala Sitharaman's package of measures for the housing sector fell short of industry expectations with many contending that more concrete steps could have been announced.
Clearly, the boost did not enthuse all the industry players who felt that the package did not address the current burning issues of slow sales and low demand. Some even felt that the Indian consumption story is not going to be revived with the latest set of measures.
However, some hailed the proposal to set up a fund of ₹ 10,000 crore to support affordable housing units that were nearing completion, but remained unfinished due to last mile funding problems.
Shishir Baijal – Chairman and Managing Director, Knight Frank India, said : “The attempt to providing for stressed assets with a special window for non – NCLT and Non NPA assets to the tune of ₹10,000 crores is important to ensure that at least the healthy projects are not pushed into bad debt like situation for want of working capital and that buyers get the home they have invested in”.
While these changes are welcome but these do not sufficiently address the issues of the sector in terms of continued slow sales and low demand, he added.
Jaxay Shah, National Chairman, CREDAI, said: "Real estate industry is the second largest contributor to our GDP and creates millions of employment opportunities. Hence we expect much more support. We are all working towards Prime Minister's dream of Housing for All by 2022 but it is becoming challenging if the requisite policy reforms will not be announced”.
According to Anarock, a real estate consultancy firm, the proposed ₹ 10,000 crore fund is not enough to give relief to the real estate sector as a whole. There are more than 5.5 lakh units that are stuck or delayed in top 7 cities alone which would be much higher if we consider all cities and towns.
"Since it doesn’t include projects that are under NPAs and NCLT, there is a possibility that not all homebuyers will get the said relief. Also, there is no clarity of the price of mid segment homes that will be included in this move," said Anuj Puri, Chairman – Anarock Property Consultants
Nevertheless, this special window of funds will give many developers an opportunity to complete their stalled projects which were in dire need of capital and thus provide relief to lakh of homebuyers across the country, Puri added
Abhilash Pillai, Partner, Cyril Amarchand Mangaldas, said "The announcement of the FM comes as a great relief to the beleaguered housing sector and the home buyers. The government backed Fund is expected to be managed by the Industry Experts and they are expected to fund non-NPA and non-IBC affordable and middle income projects for its completion. This aid to the developers will make the dreams of millions of home buyers come true".
Another measure announced by the 2nd NDA government is to further relax ECB norms for giving a boost to the affordable housing sector. This reform will certainly stimulate the appetite of the home buyers and the affordable housing sector as a whole, he said.
Niranjan Hiranandani President, Naredco, welcomed the announcement of House building advance to help government officials buying homes. He said, “This is a big sector that buys housing, these will be incentivised to buy homes, which is positive. Taking this further, there are other segments of home buyers who also need to be incentivised, these also need to be given a positive boost".