New Delhi: Real estate developers welcomed the government's move to create a Rs 25,000-crore fund to help complete over 1,600 stalled housing projects, saying it will solve the long-pending problem of homebuyers.
"It's a very welcome change from the initial announcement (of September 14). Now the only criteria for eligibility are networth positive projects," real estate developers association CREDAI Chairman Jaxay Shah said.
The move, according to him, will ensure that the fund is actually deployed to complete incomplete projects which are even NPA or also in NCLT.
"We are certain that a majority of stuck homebuyers will benefit from the announcement of a Rs 25,000 crore stress fund which is going to be increased in value if needed," Shah said.
Property brokerage firm Anarock's Chairman Anuj Puri said the move will bring huge relief to stuck homebuyers and boost sentiment in the sector which is facing a demand slowdown.
In his comments, NAREDCO President Niranjan Hiranandani said the vexed problem of delayed and stalled real estate projects appears to have found a solution.
The announcement will prove to be a win-win for both, home buyers as also real estate developers, "but the devil in the detail, in this case, will be quick implementation," he said.
Welcoming the decision, Anshuman Magazine, Chairman and CEO - India, South East Asia, Middle East and Africa at CBRE said the move will go a long way in building confidence in the real estate sector not only from the end-user perspective but also from an investors' perspective.
Knight Frank CMD Shishir Baijal said the inclusion of projects under NPAs and NCLT into the gamut of eligible projects, albeit net positive projects, into the special window funding is a welcome decision.
"The extension of this benefit to mid-income beyond the affordable housing segment is a critical step forward. We welcome these changes and feel that this will help create greater momentum in stock movement," Baijal added.
Dhruv Agarwala, Group CEO of Elara Technologies, that owns PropTiger.com and Housing.com, was of the opinion that the decision will be a "big relief" not only for consumers whose delivery is stalled but also for the builders who were desperate to raise funds to complete their projects but unfortunately couldn't complete them because of lack of funds.
"This will also encourage prospective buyers who have delayed the buying decision," said Agarwala.
With this announcement, CREDAI President Satish Magar said, all developers have been enabled to rise above all challenges and complete their project without further delay.
While talking to ETV Bharat Suresh Hari, Chairman of CREDAI, Bengaluru said that it is breath taking and path breaking approach which is showing sincierity of the government in addressing the economic scenario of the country.
He further added it will help stressed assets or NPAs, changes in company law and income tax law has made these stressed assets approachable solutions for any creditors or debtors.
These measures would have a wider impact by accelerating the much-sought investments, growth and above all employment, he added.
Raheja Developers Nayan Raheja welcomed the move saying this will provide relief to homebuyers as well as developers and boost housing demand.
Meanwhile, Deloitte partner Rohinton Sidhwa said getting stalled real estate projects moving through government-sponsored funding will breathe life into the housing market.
The AIF 2 structure of the fund is a pass-through for tax purposes.
The fund does not pay tax on its investment income and hence will facilitate the financing activities in a tax-efficient manner, Sidhwa added.
Announcing the Cabinet decision, Finance Minister Nirmala Sitharaman said several sovereign funds have expressed interest in the scheme and may join at a later stage.
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