Around $8.7 billion Mumbai region’s realty loans severely stressed, double of NCR

The NCR real estate market has so far received total loans worth $23 billion from banks and non-banking finance companies (NBFCs) and housing finance companies (HFCs). The liquidity crunch in the country’s top 2 real estate markets – MMR and NCR –
Out of total $35 billion loan advances given to developers in Mumbai Metropolitan Region (MMR), nearly $8.7 billion or 25% is currently under severe stress. This is exactly double of the total stressed loan amount in the National Capital Region (NCR) at $4.3 billion, showed an ANAROCK property Consultants study.

The NCR real estate market has so far received total loans worth $23 billion from banks and non-banking finance companies (NBFCs) and housing finance companies

 

Bengaluru’s property market stands apart in terms of the existing stressed loans. Merely 1% or $160 million of the total $16 billion real estate loans in the city are in the ‘red alert’ category. This is due to better financial discipline of the city’s developers, lower demand and supply mismatch and range-bound property prices to ensure gradual rather than haphazard growth.
The liquidity crunch in the country’s top 2 real estate markets – MMR and NCR – is unrelenting. Both markets collectively have loans worth $13 billion under severe stress with extremely poor prospects of recovery from the borrowing developers. This is on account of many developers’ earlier dependence on high leveraging and also engaged in fund diversions. To compound the problem, housing sales have remained tepid over the last few years, resulting in depleted cash reserves, the ANAROCK report said.

Bangalore supersedes NCR and MMR markets in servicing its debt to banks, NBFCs or HFCs. The city has much better stress-level readings with over 70% of total loans completely stress-free. In NCR, the stress-free share is at 53% and in MMR, it is 58% of the total loan advances.

Of the total real estate loan of $93 billion, NCR, MMR and Bangalore together account for a whopping 80% share or $74 billion. Of the overall loan amount extended to real estate, $14 billion or 16% is under severe stress while nearly 62%) is completely stress-free. The remaining 22% or $21 billion loan amount is under pressure but can potentially be resolved.

 

sources: realty.economictimes.indiatimes.com

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