Loan account growth 6.19%, amount dropped by 11.79% in first three quarters of the fiscal
The growth in new loan accounts in real estate sector in Gujarat in first three quarters of the current financial year stood at 6.19 per cent over corresponding period in the previous fiscal, the slowest in past three years, said a recent banking report. Even worse, the loan amount disbursed dropped by 11.79 per cent over previous fiscal. Realtors say this is because of overall economic slowdown that has not only reduced new launches but has also affected purchasing power of the masses. However, a section feels that this is because of teething troubles because of reforms carried out in quick succession and things would improve after upcoming elections.
According to the report of State Level Bankers Committee (SLBC) for October – December quarter of the fiscal 2018-19, first three quarters of the fiscal witnessed loan disbursal to 1,20,613 accounts, a rise of 6.19 per cent over 1,13,585 account during the corresponding period in the fiscal 2017-18. The corresponding figures for fiscal 16-17 and 15-16 are 76,193 and 56,230 respectively. In terms of actual amount of loans disbursed, the figure are Rs 15,535.5 crore for 18-19, for Rs 17,611.9 crore for 17-18, Rs 8,846.33 crore and Rs 5,789.64 crore respectively.
Vijay Shah, MD of Vijay Shah Builders said that the slowdown is a reflection of overall slowdown in the economy. "The curbs on NBFCs regarding lending has hurt new launches. Builders who were launching three or more projects a year, are now launching only one project. Now even banks have put curbs on fresh loans. This will obviously reduce new launches and sales," said Shah.
Jaxay Shah, national president of Confederation of Real Estate Developers of India (CREDAI) said that the slowdown is a result of reforms in quick succession. "We had RERA and GST. But the foundation of the sector is strong and things will take of after elections," he said.
Deepak Patel, former president of Gujarat Institute of Housing and Estate Developers (GIHED) said that state government's move to clear project plans online had also slowed down project launches. The software was not ready and realtor were desperate that their plans get the nod. It was after the state government allowed offline clearance that projects got approval.
Vijay Shah said that there is no respite in inventory pile up, whether it is residential, commercial or affordable segments.
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