Participating developers remained confident
(1) strength of underlying demand
Lodha to develop 1.1 million square foot warehouse for Skechers in Palava
Positive DLF on growth as residential and commercial activities return to normal.
(2) their risk aversion for borrowing and
(3) plans to launch more projects as inventory levels are low
Takeaways from the roundtable on credit and its availability for real estate.
-The availability of credit from banks is one of the reasons for consolidation. The number of lenders declined significantly after the NBFC crisis in FY2018. Banks resumed direct lending but to select names
– Private equity continues to see a huge opportunity in residential real estate: developers want to expand further and opportunities for private equity developers to participate in projects remain high.
– Term of loans: an ideal period to retain working capital debt for residential projects is between 12 and 30 months
– Will rising interest rates have an immediate impact on housing demand? Historically, interest rates have not been the primary determining factor for end users buying homes. The lender and developer agreed that pricing and ticket size of the offer remain the key affordability metrics for buyers. While rapidly rising interest rates may dampen sentiment, developers will focus on keeping products affordable (low price increase) and may offer attractive payment options.