Currency ban to impact housing finance companies
The attack on black money will have some unintended consequences on the sector that’s been on a roar — housing finance companies.
Stagnant real estate prices which have been worrying many companies as their recovery risks mount with very thin cushion for recovery, say they may have to pull back on the what in popular parlance is Loan Against Property or LAP.
“If real estate prices fall by 20%, it will have an impact on the LAP portfolio of companies and result in higher NPAs for housing finance companies accepting EMIs in cash,” said Anil Sachidanand CEO, Aspire Home Finance.
“This move is a new dawn for real estate sector,” said Kapil Wadhawan, chairman, DHFL. “This puts a lid on lots of corrupt practices in the real estate sector. It will ensure transparency as we all knew that some parts of real estate were reeling under corruption.”