I anticipate tough times for the realty sector in the days to come as most developers are unable to dispose of their inventories as unsold units pose a huge problem for builders. The ticker size is big in cities like Mumbai and metropolitan towns and investors are shying away for want of funds and notable returns on properties. Banks have yet not gone after developers who have defaulted anticipating turnaround which is nowhere in sight. With NPA’s of most banks rising, it is a matter of time before banks mortgage unsold properties of developers and this would be a huge setback as property prices would crash in the days to come.
Redevelopment of old housing societies is facing a bigger problem as projects are stalled for want of funds after buildings have been demolished and home owners living a life of stress as even their rent cheques are either stopped temporarily or bounced for want of funds. The government needs to bail out this sector with realistic simple procedures where TDR are sold at reasonable rates and other subsidies and grants given so that people get a shelter over their head. Banks too can enter as partners to the projects by themselves taking care of finance and depending on developers for other expertise!
S.N.Kabra
(The views expressed by the author in the article are his/her own.)
