CREDAI CONCLAVE - `Sector needs hard data'
A white paper released jointly by Credai and CBRE at the two-day Credai con clave said the impact of an unprecedented measure like demonetization had only a short-term impact, noting that the industry was already moving towards increased transparency and governance reforms.
The white paper also said that the sector was likely to see the inflow of more formal sources of capital, with institutional capital likely to be infused into the sector in the longer term.
While according infrastructure status to affordable housing was hailed as a landmark decision, issues relating to access to funding and dearth of agencies for loan disbursements to low-income category of consumers exercised the minds of developers and experts.
Manoj Gaur, president of Credai NCR, said: “With increased interest in affordable housing, the sector needs more support from banks and housing finance companies to achieve the PM Modi's vision of `Housing of all by 2022'. Due to low margins, we need special facilities from partners to fund construction. With infra status, Budget 2017-18 has cleared a funding roadblock and we look forward to availing the facilities given for infrastructure, as acquiring land and approvals after RERA may take one and a half years. We will be completely compliant with the definition of affordable housing when planning projects, and leave no room for interpretation.“
“Nearly 20 million housing units are need ed in urban India, while rural India needs nearly 40 million housing units. The government has asked the sector to participate and we are clear that this vision needs to be seen through. However, resorting to increasing the Floor Space Index (FSI) to meet the demand is not the only solution. We do not want a situation where developers build projects beyond the capacity of the market to absorb, while incurring cost overruns and, ultimately, building large projects which are hard to maintain in the long run. Access to a consolidated national database to estimate locationspecific demand would help ease this issue,“ Patel said.
Speaking on the availability of cheap finance for affordable housing, Vipul Roongta, managing director and CEO of HDFC Capital Advisors Limited, said: “The volume of conversation around affordable housing has created momentum and expectations from the real estate sector. Scalability and standardization are essential to bring down the cost of business, overall success, and winning the interest of investors. While scheduled commercial banks and infra both do not include lending for land, funding for construction and overheads can come from banks and financial institutions. Cheaper capital, at 8-8.5% is already being provided to developers, based on their corporate ratings. Bonds and rated security financial instruments are viable for financing cheaper capital, and also from a tax perspective.“