Loans to Real Estate Developers fell 43%: FY20
The general slowdown in the market, the non-banking financial companies (NBFC) crisis last year, and the COVID-19 pandemic this year, brought down the number of loans sanctioned to real estate developers by 43 percent on a year-on-year basis.
Data analytics firm has said for the nine-month period in 2020, the decline in real estate wholesale lending for both residential and commercial real estate projects was down by almost 35 percent, a study by Propstack.
The number of loans sanctioned in 2019-2020 stood at 641 for an amount of around Rs 1.27 lakh crore and those for the nine-month period this year stood at 366, worth 78,315 crore, the study said.
There is a 35 percent pick up in the number of loans sanctioned to developers in the third quarter this year on the back of lower interest rates and stamp duty reduction, not to mention the offers doled out by developers during the festive season.
Also, there is an overall decline of 60 bps in interest rates in 2020 across lending institutions. For developer loans borrowed from banks, the dip was .1 percent; for those borrowed from housing finance companies (HFCs), the reduction was .4 percent; and for those lent by NBFCs, the reduction in rate was 1.2 percent.
The study also noted that there was a decline of -1 percent in interest rates for term loans or construction finance. It was down by .8 percent on loans taken through debentures (early stage finance) and .5 percent through lease rental discounting. The overall decline of .6 percent, it added.