Conference on Financing Housing and Real Estate Projects
National Real Estate Development Council (NAREDCO) today along with Shri Nagesh Pydah, Chairman & Managing Director, Oriental Bank of Commerce, Mr. Rohtas Goel, Chairman Omaxe, Mrs. Aruna Sundararajan, Joint Secretary, Ministry of Housing & Urban Poverty Alleviation, Govt. of India, Shri Sunil Dahiya, MD, Vigneshwara Developers and Brig. R R Singh, DG, NAREDCO shared their views on Financing Housing and Real Estate Projects.
- (1888PressRelease) July 27, 2011 - Since housing is one of the basic needs and its estimated shortage is more than 25 million at present, pro active policies are a must to facilitate its growth. Moreover, with urban population accounting for about one third of India's total population is growing rapidly on account of high economic growth of 8-9 percent per annum therefore it is desirable to create an enabling environment to increase the flow of funds to the real estate sector.
Talking on the occasion, Shri Nagesh Pydah, CMD, Oriental Bank of Commerce said "Banks are keenly funding residential property but the commercial funding is yet to pick up. The need is to emphasis the growth of mortgage industry which is just 7% currently." Also added, the ratio of home loan is more than the share of personal loan and the stress should be on developers to focus on Affordable Housing, as financial institutions have more interest in lending." Moreover the various constraints bank faces while financing are, developers reluctant to ring fence and non adherence to the norms of FSI, However, I would Thank Mr. Rohtas Goel, President NAREDCO and the team members for coming up with such an issue to bring into notice of the society and look forward to many more such upcoming programmes.
Mrs. Aruna Sundarajan, IAS, Joint Secretary (RAY), MoHUPA, said "HUPA is committed for real estate issues and it has created two working group - first group focuses on real estate concerns and second group under IDFC is looking for financing housing and real estate. Therefore, the focus should be on better synchronization of Govt., financial institutions and developers to achieve housing for all." She added "that bottlenecks like supply of land needs to be tackled, however I assume reforms for finance related to low housing will come in short period of time with the help of World Bank and ADB."
As per NAREDCO, hotels, restaurants, hospitals, warehouses, educational institutions, industrial parks are also included in the sub-category of Commercial Real Estate and an upper ceiling of 4 percent out of the total ceiling of 10 percent for CRE category has been assigned to it. We suggest hotels, restaurant, hospitals, warehouses, education institutions and national parks be categorised as part of infrastructure and commercial real estate be extended to an exposure of 10% or more. Further the total priority sector credit exposure of 20% assigned to CRE to be increased with proportionate hike in the sub categories of total bank advances.
Mr. Sunil Dahiya, Chairman of Business Development, NAREDCO & MD, Vigneshwara Developers Pvt. Ltd, shared his view point, that "Govt. initiatives' are not able to justify the housing requirements in the country as per there master plan. They came with ambitious schemes for constructing 8000 to 10000 flats while there own master plan shows that Delhi alone envisages a stock of 35 lack houses. This underscores the huge gap between the performance and demand, even if one goes by Govt.'s own standards. He suggested the CMD of Oriental Bank of Commerce, Mr Pydah, firstly to have a longer duration of loan repayment say 30 years against 15 years to encourage more buyers in the market and secondly, the basic raw material for any urban development i.e. land purchasing, should be financed by bank from the beginning. "
About NAREDCO:
National Real Estate Development Council (NAREDCO) is an autonomous self- regulatory apex national body under the aegis of Ministry of Housing and Urban Poverty Alleviation, Government of India.
The Council is the collective voice of the real estate industry and is the leading advocate for developing standards for efficient, effective and ethical real estate business practices, valued by its stakeholders. NAREDCO works to create and sustain a business environment conducive to the growth of real estate industry in India in
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