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Government fund to help complete 2.5 lakh housing units: Report

Out of these, approximately 92,350 units have been delayed in MMR and could get a new lease of life.

Representative image

Representative image

As many as 2.5 lakh affordable and middle segment housing units that do not come under NCLT but are stuck across top seven cities can avail relief from the government's proposed last mile funding worth Rs 10,000 crore, a new report has said.

Out of these approximately 92,350 units have been delayed in MMR and could get a new lease of life, followed by 67,240 units in Pune. Besides, at least 60,700 units in NCR can get revived, as per the report by Anarock Research.

While projects by Jaypee, Amrapali and Unitech in NCR do not qualify, at least 60,700 homes across the entire region may see revival. At least 30,030 units are in the affordable category, the remaining in the mid-segment.

In Bengaluru, Hyderabad and Chennai, merely 9 percent of the total units can avail of the government’s benefit when it is implemented. These three markets have a combined inventory of 22,040 delayed units that fall within the sub-range of Rs 80 lakh, the maximum being in Bangalore with 11,880 units, followed by Chennai with 8,960 units and Hyderabad with 1,200 units, it says.

In Kolkata, at least 9,600 stressed units will be eligible for the government’s relief.

There are a total of 4 lakh units that are stuck in various stages of non-completion across budget segments that don’t fall under NCLT; all units launched during 2013 or before. Of this, nearly 63 percent (or 2.5 lakh units approx.) are within affordable and mid segments (sub Rs 80 lakh budget) across top 7 cities. But premium homes that constitute about 1.5 lakh units or 37 percent would have to wait longer, it said.

However, since data for projects under NPAs is not available, there could be a further dip in these numbers.

“Among the key issues that remain, the price definition of mid-segment homes that can avail of this benefit tops the list. Secondly, the timeline for setting up this fund and its actual implementation needs clarification. If the implementation process is delayed over the next four to five months, more units could either turn into NPAs or fall under NCLT - thus eliminating their eligibility for this funding,” says Anuj Puri, Chairman - ANAROCK Property Consultants.

Finance Minister Nirmala Sitharaman on September 14 announced a special window worth Rs 10,000 crore for last-mile funding to networth positive projects.

Other measures announced include relaxation of External Commercial Borrowings (ECB) guidelines for financing of homebuyers under Pradhan Mantri Awas Yojana (PMAY) and reduction of interest charged on housing building advance via linkage to 10-year G-Sec yields.

The size of the stressed asset fund would be Rs 10,000 crore and would be contributed by the Centre. A similar sum would be contributed by outside investors: private capital from banks, sovereign funds and development finance institutions.

The creation of a Rs. 20,000-crore fund is for last-mile funding of affordable and mid-segment housing projects only. Most of these projects should have achieved around 60 percent completion, but lack cash flows for the balance amount.

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