The Confederation of Real Estate Developers’ Associations of India (CREDAI), an apex body representing the real estate developers, will undertake a survey to assess the number of semi or partially completed real estate projects across metros.
The information is to be submitted to D. K. Mittal, Union Secretary of Financial Services. On Monday, chairpersons of some leading Indian banks, Mr. Mittal and senior members of CREDAI met to discuss funding issues faced by real estate developers.
Addressing a press conference after the meeting, CREDAI National President Lalit Kumar Jain said the survey would be done by a reputed agency. “We are trying to get the preliminary numbers in the metros in the next ten days.”
He said that Mr. Mittal had told commercial banks to focus on funding partially completed projects and projects in small towns.
“All bankers agreed that besides banking, other issues such as land availability, delays in project approvals and FSI (floor space index) restrictions needed to be addressed for development of the housing sector,” he said.
Mr. Jain said that bankers had insisted on the one-project one-bank norm and opening of escrow accounts. In metro cities, the developers should have one lead banker for funding.
“The bankers also felt that the approval process should be speeded up across the country by sensitising all the States since real estate is typically a local issue, and rules differ from State-to-State and even city-to-city,” he said.
Mr. Jain said the interest rate on housing loans should be 7 per cent and this would strengthen demand. “All other expenses such as stamp duty and various taxes should be added to the overall cost of the project and should be funded up to 90 per cent of the total cost,” he said. CREDAI has also called for easing the RBI risk weightage of 1.25 per cent given to the real estate sector.
Mr. Jain said the cut in the cash reserve ratio (CRR) announced by the Reserve Bank of India (RBI) on Monday was not enough.