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In Gujarat, the growth in new loan accounts in the housing sector has been the slowest in the last three years. The growth figure in the first three quarters of this FY stands at 6.19%, as compared to the same period during the last fiscal. This is the slowest, considering the overall growth in the last three years. To make things worse, the amount disbursed has experienced a drop by 11.79% over the last fiscal. According to the realtors, the reason behind this drop is the overall slowdown of the economy, that has brought down the number of new launches and affected the buying abilities of the people. However, certain experts feel that this has happened due to the reforms that have been carried out in recent years. The situation is likely to improve in the coming years.
The State Level Bankers Committee (SLBC) report for October to December quarters of the FY 2018-19 states that loan disbursal to 1,20,613 accounts took place during the first three quarters. This is a 6.19% rise over the corresponding fiscal period during 2017-18. In the corresponding quarters of 2016-17 and 2015-16, the figures were 1,20,613 accounts.
According to experts, the overall slowdown of the economy is responsible for this slowing of growth. A number of new launches have been hurt by the curbs imposed on NBFCs, regarding crediting. Developers who were previously launching 3-4 projects in a year are now launching one project. Presently, the banks are imposing restrictions on the new loans. Evidently, the number of new launches is likely to be reduced.
The national president of Confederation of Real Estate Developers of India (CREDAI)has stated that the reason of this slowdown is the impact of quick reforms. In the last couple of years, RERA and GST have been launched. These reforms have increased the transparency in the real estate sector. Although the slowdown is evident now, the reforms will benefit the industry in the long term. Besides, the former president of Gujarat Institute of Housing and Estate Developers (GIHED) believes that the state government had decided to clear the plans of the projects through the online platforms. This move also led to the slowdown of the launch of new projects. They did not have the software ready and the real estate developers were desperate to get the plans approved. The projects finally got the approval after the state government came up with the option of offline clearance.
Some of the experts state that the inventory is still building up in all the segments, including the residential, affordable and commercial ones. However, once the industry falls back in gear, it is likely to experience a smooth business, thanks to the reforms that the government has introduced in recent years.
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