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affordable housing in India, Government of India, housing in India, Indian real estate, Indian real estate sector, RBI news, Real estate developers, real estate india, real estate sector, Reserve Bank of India, residential sector
The Reserve Bank (RBI) of India has yet again come to safeguard and promote the interest of home buyers in the Indian real estate sector. Beginning from the April-June, 2013 quarter, the RBI has reviewed its policies to smoothen the flow of liquidity in the realty sector and also encourage the developmental participation from more numbers of realtors.
After bringing down the rate of interest to be levied on the external commercial borrowing in the residential sector, RBI has recently decreed nonpayment of upfront loan amount to the builders. The loans raised from the banking sector shall be linked to the construction plan of the concerned realty project and no substantial amount shall be paid to the builder as an advance.
According to the realty experts, the latest ruling is envisioned to strengthen the home buyers with a more transparent real estate pricing. In order to refrain from irrational lending in the realty market, The RBI has taken this firm stand in order to streamline the financing procedures availed by a novice buyer in this sector. The ruling is expected to lower down the inflated price tags of properties and also going to facilitate the timely delivery of constructed projects.
The RBI and the Government of India have been instrumental in restructuring the administrative structure for real estate in the recent past. In late June 2013, The Reserve bank also relaxed certain regulations in the borrowing sector which have been instrumental in expanding the scope of realty operations in the country.
The minimum paid-up capital requirement of 50 crore for the housing finance companies to externally borrow the capital stands withdrawn in the present day. Also the minimum years of experience for the foreign developers to develop a project in India has also been curtailed to a bare minimum of 3 years. These policies have been encouraging for a recuperated vigor for more investments from different channels to funnel into the Indian real estate sector.
The mounting inventories with the developers and a parallel rise in demands of affordable housing in India have warranted such measures from the central bank in the present times. The ruling to connect the loan offerings with the construction plan of the specific projects has come as a respite to the speculation ridden market. It has come at the right time when the prices have been irrationally bloated in the realty market and the buyers are finding it tough to own a reasonably priced home.
The home loan ruling from the Reserve Bank of India is expected to induce maturity in the pricing mechanism of the real estate sector in the country. In summation, it has been a considerate measure for the buyer segment of the society and is expected to boost sales at a healthier pricing mechanism in the coming future.