The data and statistics show that in the first quarter of the year 2017, the segment of residential housing received an investment of Rs.3326 crore while in the previous quarter it had received Rs.5725 crore. Because of the heavy downfall in sales, funds are being invested very carefully and cautiously in the residential projects.
Even the builders are doubtful to borrow funds as they only want to concentrate on completing the already ongoing-projects. The interest of the investor has been reduced
mainly due to the following three reasons –
1.Non-banking finance companies giving increased level of competition
2.Limp sales
3.Reduced security shield for private equity funding
As most of the developers are showing a delay in the payment of the principal amount, the money received from the sales has been used for making the payment in the form of interests, for the last three years. As an obvious result, the level of security has reduced in a great amount and the new deals are not appearing to be very lucrative because debt funding is the only way for most funds and that needs security.
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