Lower Interest Rates Driving Affordable Housing Sales: Brigade Enterprises CFO Atul Goyal
Real estate companies are capitalising on lower interest rates on home loans to sell affordable housing projects in Tier I cities, according to Brigade Enterprises Ltd.’s Chief Financial Officer Atul Goyal.
“Today, the sales are mostly in mid-income and affordable housing,” Goyal told BloombergQuint in an interview. “The home loan interest rates are now very low which is driving customer sentiment.”
Brigade Enterprises, which primarily caters to Bengaluru, Hyderabad and Chennai, said it has witnessed around 73 percent rise in sales compared to last year. That comes as another builder Kolte-Patil Developers Ltd. informed the exchanges that it sold 500 apartments worth Rs 205 crore in Pune. Delhi-based Ashiana Housing Ltd. too announced it received 322 bookings for its Jaipur project.
That comes when India’s real estate developers are struggling to raise capital after funding from non-banking lenders dried up following the surprise defaults at AAA-rated IL&FS group a year ago.
To revive the sector, Finance Minister Nirmala Sitharaman launched a Rs 25,000-crore special fund to aid stalled mid-income and affordable housing projects in September.
According to a report by Antique Stock Broking, financially sound developers were not affected by the liquidity crunch. From mid-2018 and 2019, some markets especially Bengaluru and Pune saw significant recoveries in residential sales, the report said.
WATCH | Brigade Enterprises’ Atul Goyal on India’s real estate sector