Realtors push for more reforms
Realtors are not content even with the second stimulus package offered by the government. Seeking more liquidity, the Confederation of Real Estate Developers Association of India (Credai) called on the RBI Governor with a fresh list of proposals.
“The stimulus package is not sufficient to boost demand. Real estate can act as an engine of growth but unless the policies are made favourable, it will be difficult to boost buyers’ confidence,” said Rajnikant Ajmera, president of Credai. The association maintained that bankers are reluctant to lend despite RBI’s efforts to make more liquidity available by reducing cash reserve ratio and reverse repo rate. This has caused delays in projects. The association has also asked for a further reduction in interest rates.
“The interest rates for housing finance are still high. It needs to be brought down to 7%. Moreover, construction finance should be made available at 9%,” said Ajmera. Developers said banks and housing finance institutions enjoy concessions for loans up to Rs20 lakh but there was no incentive for Rs35 lakh-plus loans. Since most of the projects are in the range of Rs30 lacs to Rs50 lacs, they feel, this norm needs to be revised.
They also demand that FDI be allowed for purchase of ready property at IT parks and malls without any restrictions.
ECB borrowings, they demand, should be permitted in housing construction particularly for completion of ongoing projects where there is already equity in the form of FDI. Currently, ECB continues to be distant for housing developments. This source will be additional to the funds from banks and FIs.
In the long run it will reduce the cost of finance and thereby the pricing of housing construction in the country, the developers said.
“We expect results in policies in coming months,” Ajmera added.