The growth in the disbursement of housing loans in Gujarat slowed down at 29.7% in the first three quarters of the fiscal 2017-18 compared to 55.72% in 2016-17. Similarly, the growth in actual amount disbursed also dropped from 101.08% to 51.28% during the same period.
According to the report of the State Level Bankers Committee (SLBC) for the third quarter of fiscal 2017-18, 49,376 loan accounts amounting to Rs7,431.86 crore were sanctioned during the quarter. For the first three quarters, a total of 1,13,586 loan accounts were sanctioned, a rise of 29.72% over 87,563 accounts sanctioned during the first three quarters of 2016-17, while the total amount disbursed stood at Rs17,611.18 crore, a rise of 51.28% over Rs 11,642.29 crore in first nine months of 16-17.
While the growth figures appear healthy, they are almost half of the growth recorded for the corresponding period in the previous fiscal. Then the loan accounts had risen by 55.72% while the loan amount had risen by 101.08%.
Realtors, although bullish about the sector, attribute the slowing of the growth rate to the combined effect of demonetization, introduction of Real Estate (Regulation and Development) Act – 2016 as well as roll out of Goods and Services Tax (GST) in July 2017.
“RERA was introduced in October 2016, then came demonetization, so the growth started slowing down since then. Introduction of RERA also resulted in confusion on compliance aspects. Then came GST in 2017. There were teething troubles then. What needs to be done was not clear, so definitely, the growth slowed down,” said Vijay Shah, MD of Ahmedabad-based Vijay Builders Pvt Ltd.
Pavan Bakeri, director of Bakeri Group also share the views, admitting that there was lots of confusion. He told DNA that all the factors put together elongated the turnaround time of a project, right from getting the land to selling an apartment. “We had to wait till the project was approved by RERA. Things were ambiguous during the rollout of GST. So, in spite of having inventory, realtors were not able to sell. This washed away quite a bit of growth,” said Bakeri.
Expert Speak
- Several experts see lots of demand in the affordable housing segment. In commercial space, the demand for the leasing of space has also grown.
- Shah said that the effects of shock are now settling down and soon the previous growth rates would be revived in fiscal 2018-19.
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