Uttar Pradesh Real Estate Regulatory Authority (UPRERA) has come up with a grading system for real estate developers and projects to protect the interests of homebuyers and has invited public comments before finalising the framework.

“We have invited public comments on the framework until May 13 and would be finalising it based on the feedback we receive within the next 15 days. It may take us about a month to finalise the framework and we would then implement it in due course,” Rajive Kumar, Chairman, UPRERA told Moneycontrol.

“The grading system would be upgraded based on suggestions of the stakeholders and would be implemented in due course in consultation with the state government,” he said.

Kumar said that the purpose of grading both buyers and projects is that over a period, it creates a track record for builders and signals to the public that the promoter and the project have a higher rating.

Projects would be rated for their construction quality, legal quality, financial quality and compliances with UPRERA. A project’s assigned grading will serve as a benchmark against other graded projects in the state. The grading will be applicable for all UPRERA registered projects, sources said.

The proposed grading framework can be accessed on the UPRERA portal (https://www.up-rera.in/index). Feedback from stakeholders would be received until May 13.

UPRERA, after receiving inputs from development authorities, industrial development authorities, homebuyers associations, promoters associations and other stakeholders, in consultation with the consultant CRISIL has designed the grading framework for projects registered under RERA, sources said.

The grading evaluation for projects will essentially involve assessing the developer’s track record in executing projects as per a stipulated schedule along with adherence to timelines and analysing the organisational, legal and financial risks associated with it.

Real estate developers would be graded on a scale of 1 to 5. One Star would mean low likelihood of project being delivered as per agreed specifications and within the stipulated time schedule; two Star would indicate below average likelihood of project being delivered; 3 star would indicate average likelihood of project being delivered; 4 star would indicate a strong likelihood of project being delivered and 5 star would mean excellent likelihood of the project being delivered.

The project construction quality parameter would provide an independent assessment of aspects such as structural quality, construction quality and the likelihood of time and cost overruns. This parameter will be used to determine if the structures are designed as per the specified quality norms, seismic zone requirements and IS codes compliances, sources said.

Project sponsor quality would focus on the developer’s construction and legal track record, and will evaluate its financial strength and ability to complete projects as per timelines. It also evaluates promoter’s organisation strength, years of experience in real estate business and ISO or green building certifications for the organisation.

The financial quality indicator would assess the viability of the project as well as the financial flexibility of the developer. A developer’s financial risks would be assessed to ascertain its ability to complete projects on time.

Compliance adherence parameter would evaluate the developer’s compliance with the requirements of UPRERA and the customer feedback parameter would measure the developer’s ability to cope with customer complaints.

Private equity real estate investment in India stood at Rs 1,640 crore in the first quarter of 2020, registering a drop of 62 percent quarter-on-quarter on account of the slowing economy and the COVID--19 outbreak, according to a report by Colliers International India.

Colliers witnessed increased investor focus on acquiring opportunistic assets in India. During 2019-Q1 2020, Colliers witnessed Rs 5,600 crore of investment inflows into hospitality real estate in India; most of it involved distressed asset trade transactions.

For comparison, this is nearly eight times the hospitality sector investment volume recorded in the preceding five quarters, the report titled Opportunistic Investment Avenues Increase: Identifying opportunistic strategies despite the slowdown, by Colliers International India said.

These transactions have been supported by investors’ increasing confidence in the Insolvency and Bankruptcy Code (IBC) 2016. The IBC enables investors to purchase the asset at an attractive valuation, without saddling them with lingering debt, the report said.

“The opportunity lies in logistics and data centres as well as core commercial office assets. Distressed assets, especially in the hospitality space, are also attractive. The opportunistic asset trade transactions is expected to gain pace in the next 2-3 years with the current economic slowdown,” said Sankey Prasad, Managing Director and Chairman at Colliers International India.

The current slowdown has resulted in reduced private equity inflows into the Indian real estate market. Considering the outbreak of COVID-19, slower decision‐making on the part of institutional investors in H12020 is foreseen, which could constrain capital deployment in India.

“We recommend investors capitalize on the situation and focus on commercial office assets as India’s competitiveness remains. Further, a lower interest rate regime is likely to compress cap rates over the long term, said Piyush Gupta, managing director, Capital Markets (India) at Colliers International.

The outbreak of COVID-19 and slower economic growth among other factors have altered the investment outlook for 2020. Hence, we have lowered our projection of private equity inflows in real estate to about $3.5 billion in 2020 owing to slow decision-making by investors.

However, the changing market situation presents opportunities in the residential segment, income-generating core commercial office assets and opportunistic assets, especially in hospitality space, said Megha Maan, Senior Associate Director, Research.

A real estate developers’ association in West Bengal has sought permission from the state government to bring labourers back at the project sites after the Centre allowed to resume construction works with some restrictions during the ongoing lockdown, an official said on Saturday.

The industry body urged the state government to allow movement of workers from their home towns and native villages after the Centre had given its nod to restart construction activities from April 20 on those projects where labourers are already available at the sites.

“We have written to the state government seeking permission to start works at the construction sites and reopening offices in a partial and phased manner,” Credai West Bengal president Sushil Mohta told PTI.

But the challenge with most of the projects has been availability of workers as many labourers hailed from districts and they left for their homes immediately after chief minister Mamata Banerjee had announced the lockdown, he said.

“We have also urged the state to allow us to bring labourers back from their home districts such as Medinipur, Murshidabad, Bankura and other areas,” Mohta, also chairman of the Merlin Group, said.

Citing a similar experience, National Real Estate Development Council, Maharashtra vice president Ashok Mohanani said majority of workers are migrant labourers and have returned to their native places at this time.

“Reverse migration has hit the real estate sector which has resulted in a labour shortage,” he said.

There are 8.5 million workers in India engaged in building and other construction activities.

The guidelines issued for restarting economic activities during the lockdown “do not allow travel of labourers to construction sites”, an industry expert said.

Labourers available at construction sites can commence work from April 20 in strict adherence to social distancing norms, he said.

The industry has also sought permission to bring construction materials at the sites during the ongoing lockdown imposed to check the coronavirus outbreak, he said.

Real estate sector has been passing through a challenging time due to financial crisis, he added.

Several real estate regulatory authorities - MahaRERA, Karnataka RERA and now UPRERA - have decided to extend the date of completion of real estate projects by three months in view of the lockdown.

Interestingly, the authority circulars have focused on the RERA timeline and not the completion date agreed between the buyer and the builder as per the contract or the Builder-Buyer Agreement signed between them.

“RERA authorities have not extended the contractually agreed date by three months. They have only extended the RERA agreed date,” says Kunaal Shah, partner at Trilegal.

“The authorities by extending the RERA timelines have not provided any benefit to the developers vis-à-vis handover commitments to the homebuyers. The only thing the extension has achieved is that the builder would not have to apply for separate extension of RERA registration dates,” he said.

This means that on account of closure of RERA redressal forum - a homebuyer whose contractual handover timeline expires during the lockdown period, will have to wait until the lockdown is lifted to seek redressal.

It should be noted that post the implementation of RERA in 2017, most of the older projects had a completion date as per the Builder-Buyer Agreement signed between the homebuyer and the builder and a different RERA timeline proposed by the concerned developer to the relevant RERA authority.

In case of the latter, builders had intentionally pushed back the delivery date to allow themselves a buffer in case the project gets stuck for some reason. However, newer real estate projects are likely to have the same contractual and RERA deadlines.

On April 2, Maharashtra Real Estate Regulatory Authority (MahaRERA) has decided to extend the validity period for registration of real estate projects, whose date of completion or for that matter extended completion date gets over on or after March 15, for a period of three months which in this case is June 30.

On April 14, UP Rera said that in view of the slow pace of construction work due to the need for social distancing and movement restrictions and stoppage of the work following the national lockdown in March, the Authority has decided to extend by three months the date of completion of the projects with the date of completion between March 15 and December 31.

All RERA registered projects, whose completion date (including revised completion date) expires on or after March 15, has been extended by three months until June 30, the Karnataka circular had stated.

The issue with the three orders is that the date that concerns the homebuyers most is not the RERA deadline date but the date which they agreed to with the builder under a contract or the Builder Buyer Agreement. These authorities are silent on the issue.

Under the provisions of RERA, the promoter is given a facility to revise the date of completion of project and declare the same under Section 4. The RERA does not contemplate rewriting of contract between the flat purchaser and the promoter.

Also, Section 4(2)(l)(C) enables the promoter to revise the date of completion of project and hand over possession. The provisions of RERA, however, do not rewrite the clause of completion or handing over possession in agreement for sale.

Section 4(2)(l)(C) enables the promoter to give a fresh timeline independent of the time period stipulated in the agreements for sale entered into between him and the allottees so that he is not visited with penal consequences laid down under RERA. In other words, by giving the promoter a fresh timeline under Section 4(2)(l)(C) he is not absolved of the liability under the agreement for sale.

“Therefore, if a buyer has a contractually agreed date, the developer despite the RERA circular brought out during COVID-19, may still have to abide by the contract and pay delay penalty to the buyer and the buyer has every right to proceed against the developer for having delayed the project delivery,” says a legal expert.

Having said that, the homebuyer has no relief because though he can proceed against the builder, the RERA redressal forum is not open for the buyer to proceed. He can proceed only after RERA reopens after the lockdown.

RERA came into effect from May 1, 2017 and Maharashtra was the first state to implement it by setting up MahaRera. The act ended the practice of real estate developers diverting funds collected from homebuyers to other projects or for land purchase.

The real estate sector has supported the government’s decision to extend to May 3 the nationwide lockdown and expressed hope that limited construction activity will be allowed to alleviate some of the pain brought by the coronavirus outbreak.

Prime Minister Narendra Modi on April 14 extended the lockdown to curb the spread of coronavirus by almost another three weeks. The earlier lockdown was to be lifted April 15 but with most states asking for another 10-15 days of restrictions, India’s 1.3 billion people will have to stay in for all of April and three days of May.

India has, so far, confirmed 10,363 cases and 339 deaths.

“We support the prime minister’s announcement on extension of the lockdown and support the Jaan hain toh Jahan hain (if you life, you have the world) theory,” Confederation of Real Estate Developers Association of India  (CREDAI) chairman Jaxay Shah said.

“We are looking forward to the blueprint by the ministry to be revealed on April 20 and would also urge the ministry to permit limited construction activity as this will help the real estate sector unfold its economic movement in a staggered way.”

In his address, Modi said detailed guidelines on the new lockdown would be announced April 15 and some conditions could be relaxed after April 20 in places reporting no new infections.

“The need of the hour is the economic package by the RBI to address the liquidity challenges being faced by the housing sector,” said Shah.

The lockdown was bound to be extended, as India was still a few days away from flattening the curve, said Kaushal Agarwal, chairman director, The Guardians Real Estate Advisory. The decision was calibrated and prudent, he said.

“We would welcome a gradual opening of economic activity including the resumption of construction activity at project sites,” said Agarwal.

The residential real estate sector has continued to suffer from low demand and large inventory overhang due to which launches declined in the third quarter of 2019-20 but the all-India level housing prices moderated and saw a growth of 3 percent, RBI's monetary policy report has said.

Reflecting the large volume of inventory overhang, all-India level housing prices have moderated somewhat, according to the Housing Price Index of RBI.

While All-India prices have witnessed a growth of about 3 percent prices in NCR and Mumbai and dropped by almost 5 percent, it said.

Southern metros of Chennai and Bengaluru, however, saw prices increasing by 13.7 percent and 16.7 percent respectively, the report said.

Aggregate demand across sectors is expected to be impacted adversely by likely recession in the global economy, caused by disruptions in global supply chains, travel and tourism, and lockdowns in many economies. Domestic production will also be impacted by the nation-wide lockdown.

In the near-term, the challenge is to mitigate the adverse impact of COVID-19, the report noted.

The real estate prices in the city are all set to reduce after the lockdown due to Covid-19 which has paralysed the whole sector according to experts from the industry.

In addition, the builders have also demanded that the construction workers should be allowed to resume work from April 15 when the lockdown ends.

“Realty prices will definitely come down as lots of developers will be desperate to sell their product ,” said Niranjan Hiranandani, president, National Real Estate Development Council (Naredco).

However, he said that the homebuyers will not be eager to buy despite lower prices. “Homebuyer may have a job as well as the money to buy but they will not take the plunge till they get confidence. The government needs to give stimulus to all the sectors so that homebuyers get confidence,” said Hiranandani.

In addition, Naredco has demanded that the workers at the construction sites should be allowed to resume work after the lockdown ends. “We only demand that those workers staying at the construction sites should be allowed to work while maintaining social distance,” he added.

“If we don’t give work to these labourers, they will go to the villages for agricultural work and bringing them will back will be difficult,” he added.

Real estate experts said that even though the prices will reduce, builders will find it difficult to find buyers.

“The post Covid-19 scenario will be challenging as there would be an insecure job market and hence many will postpone their plans. We will see job cuts or salary reduction in many sectors. In addition, the banks will be very cautious while giving loans,” said Pankaj Kapoor, CEO, Liases Foras, a leading real estate research firm.

The real estate sector has been under pressure from the last few years. While in the last few months, things were improving a little bit, the Covid-19 has now devastated the whole sector.

In view of the country-wide lockdown on account of the novel coronavirus, or COVID-19, pandemic, Karnataka Real Estate Regulatory Authority has become the second authority after the Maharashtra Real Estate Regulatory Authority (MahaRERA) to extend the validity period for registration of real estate projects by three months.

Due to the lockdown, the supply chain for obtaining construction materials has been disrupted and labour workforce may have migrated back to their home states. Under these circumstances, real estate projects across Karnataka will take some time to restart work, a circular issued by the Karnataka Real Estate Regulatory Authority said.

"All RERA registered projects, whose completion date (including revised completion date) expires on or after March 15, has been extended by three months until June 30," the circular stated.

KRERA shall accordingly issue project registration certificates with reused timelines for such projects at the earliest, it added.

“All complaints cases listed for hearing up to April 14 before the KRERA and the adjudicating officer have been adjourned, except for urgent cases. This is to avoid gathering of litigators, lawyers and visitors. The next date of hearing in each case will be posted on the authority’s website,” it said.

Currently, there are more than 3,000 projects registered under RERA. Homebuyers said that they concur with this decision.

"But going by the impact of migration of construction labourers, efforts must be made by the government as well by builders to ensure the labour forces are retained and supported to ensure resumption of work once upon lifting of the curfew sooner or earlier," MS Shankar, Secretary, Forum for People's Collective Efforts, told Moneycontrol.

Last week, MahaRERA extended the time limits of all statutory compliances in accordance with the Real Estate (Regulation and Development) Act, 2016 that were due in March, April and May to June 30.

It had also noted that due to the lockdowns, the supply chains for obtaining construction material have been disrupted and labour force may have migrated back to their home states. Due to these circumstances, real estate projects across Maharashtra will take some time to restart work.

These are rather tough times for most businesses, but for businesses such as the indie luxury real estate company, Tahiliani Homes, headlined by designer and master of drapes Tarun Tahiliani’s young son, the 29-year-old Jahan Tahiliani, it is far more difficult.

It was just a short three months ago that they extended their real estate development and design company into the world of hospitality and high-end vacation rentals. With the current lockdown, the hospitality end of the real estate business has been paralysed. “Short term rentals will take a backseat and we won't see too many weekend visitors or trips for a few months at least. But we are seeing an increase in enquiries for long-term rentals and longer-duration stays. It's an interesting time, without any clarity on the timelines ahead.”

Hopefully, as things settle down in a few months, what will survive is the business that involves posh, individualistic homes designed by a team led by Tarun Tahiliani. Sporting architecture by independent architects, among them Sameep Padora, these swish villas are located in some of the ritziest parts of states such as Goa and cities such as Delhi and Hyderabad. The six-year-old company has already delivered over Rs 100 crore worth of inventory for its clients and hopes to expand to Mumbai, Bangalore, Coonoor and other cities and towns.

So, what's an economics scholar, son of India’s foremost fashion designer, doing in the luxury real estate business? Jahan studied economics in the US and last worked with CB Richard Ellis (CBRE) capital markets team. “Isn’t economics the basis of everything you do? It gives you a framework within which you can think,” he says. He joined the legacy business five years ago, but not on the fashion design front. Rather, he chose to metamorphose the fledgling interior design business into a hipster real estate-meets-home and hospitality design company.

Design aesthetics: Verdant spaces that are seamlessly integrated deftly handcrafted materials and finishes, muted shades of ivory, taupe, grey and black complementing each other, are some of the elements that define a Tahiliani Home, says Jahan. “Our signature style is India Modern. It involves looking at our architecture and design traditions, our artisans, through the prism of modernity. We work with all kinds of artisans across India, from marble craftsmen to Aligarh carpet weavers to Moradabad brass artisans, use indigenous materials such as local laterite stone in our Goa projects. The way craftsmen are approaching their craft is rapidly changing. Though steeped in tradition, it has a new face. We offer them a design direction to ensure it is less ‘crafty’ and more sophisticated.”

However, for those who do not “buy into the India Modern” aesthetics, Tahiliani Homes offer India Artisanal (far more detailed and embellished), Classic (drawing from colonial architecture and the Art Deco movement) and Contemporary (more steel and glass). “Often people like us to blend two styles, India Modern with Classic or India Modern with Contemporary,” he says. Their homes in Goa range from the very modern AIS Glass Villa to the more Portuguese-style villas that bring together the elements of the outdoors within the interiors via water bodies and a central courtyard.

Stating that proceeds from new sales and collection from the sold units have been severely affected due to coronavirus and the subsequent lockdown, a real estate sector body has sought the central bank’s intervention to permit a one-time restructuring of loans and to extend the moratorium period to six months for all dues, installments, EMIs and interest on loans.

In a letter addressed to the Reserve Bank of India, CREDAI MCHI has also requested the apex bank to not charge any interest during the lockdown period plus 30 days.

The body has asked RBI Governor Shaktikanta Das to intervene and facilitate one-time restructuring of loans and stimulate cash flow into the real estate sector.

“Having welcomed the RBI’s COVID-19 initiatives for the economy at large, CREDAI MCHI seeks further strategic and effective measures to combat the adverse implications of the virus on Indian realty and its stakeholders,” it said.

Proceeds from new sales and collection from the sold units have been severely affected. Coupled with complexities arising from collection of licence fees/ rentals from tenants who have been forced to shut down their establishments in retail malls and office complexes have added to the industry’s liquidity woes, it said in the letter.

To eliminate short-term uncertainty and long-term risks, CREDAI MCHI wants all lending institutions, governed by the RBI, to allow a moratorium of six months on all dues and overdue installments/EMI/interest of all loans, including term loans, which are outstanding as on March 1, 2020

The group also called for a one-time restructuring of loans. “Where lending institutions find that the project is cash-flow positive as defined by the finance ministry for the SWAMIH Fund, a One-Time Restructuring (OTR) is more beneficial in the interest of the Lending Institutions, Borrower and the Apartment purchasers, and thus should be allowed as was permitted in GFC 2008,” it said.

A clarification needs to be issued stating that dues and overdues of all loans (including loans categorised as SMA0, SMA1, SMA2 and NPA) as on March 1, 2020, shall be granted this moratorium for a period of six months.

It has also requested that no interest should be charged for the period of lockdown plus 30 days. No penal interest or default interest shall be charged for this differed period from March 1, 2020 to August 31, 2020.

The developers’ body has said ‘Term Loan’ to include Working Capital Term Loan (WCTL), Funded Interest Term Loan (FITL) or Debentures subscribed by the lending institution.

“Interest payable on term loans for the period 1st March 2020 to 31st August 2020, should be allowed to be capitalised, payable at the end of the period of term loan.  All the term loans should be directed to be extended by six months with the same terms and conditions,” it said in the letter.

“CREDAI MCHI lauds the RBI’s continuous support for the economy and its stakeholders which is extremely reassuring given the unpredictable scenario. However, considering the current predicament of Indian real estate, the industry yearns for more decisive and potent initiatives that will reinstate stakeholders’ belief. We request the RBI to permit one-time restructuring of loans and stimulate cash flow in the industry, to enable the sector to continue to be India’s strongest economic pillar for the foreseeable future,” CREDAI MCHI president Nayan Shah said.

The coronavirus outbreak and the subsequent lockdown has affected everyone. But in an endeavour to support the government in its efforts to contain the spread of the deadly coronavirus, stakeholders in every sector have come forward to lend a helping hand.

Stakeholders in the real estate sector too have chipped in with contributions. While some realtors have come forward to donate money, masks, meals and even sanitisers, there are others who have stepped forward to support the city traffic police.

Realtors apex body CREDAI's Gujarat chapter has donated Rs 5 crore to Chief Minister Relief Fund to fight against coronavirus infections.

CREDAI Gujarat tweeted that it has "donated Rs 5 crore towards Chief Minister Relief Fund to fight against COVID-19".

DLF Foundation, the CSR arm of realty major DLF, has donated Rs 5 crore to Haryana CM's relief fund and is also distributing dry ration, cooked meals, face masks and sanitisers to migrant workers affected by the nationwide lockdown.

"The COVID-19 has disrupted normal life and business in India and across the world. The need of the hour is to protect all sections of society in the country and to keep them safe and protected. Rs 5 crore has been donated to the Chief Minister's Relief Fund in Haryana," it said.The organisation in coordination with the district administration is providing cooked meals to more than 60,000 migrant labourers in Gurugram and Manesar," DLF Foundation said in a statement.

DLF Foundation has also donated 50,000 face masks, 3 lakh examination gloves and sanitisers to the district authorities in Gurugram, while 25,000 face masks have been given to the municipal authorities in Faridabad.

For Delhi and Noida, DLF Foundation in coordination with the district administration and other authorities provided meals for nearly 25,000 migrant workers on March 29.

Bengaluru-based Embassy Group too has stepped forward to support the city traffic police.

"Identifying the zones around Embassy Manyata Business Park, Embassy Tech Village, Embassy Icon and Embassy Paragon, Embassy Group has set up four hydration stations where the police personnel can take refreshing time breaks. The stations are equipped with drinking water, refreshments and toilet stops," Embassy said in a  statement.

In addition, Embassy Group has procured hand sanitisers, disposable masks and nutritional snacks. These items have been handed over to the headquarters and will be distributed daily over the next 8 days to the 44 stations and their 3,800-person task force.

"With our police and healthcare professionals at the forefront of controlling the spread, felt that it was our duty to support them in performing their duties. I would like to request other companies and Bangalore's citizens to come forward to join us in helping out," said Aditya Virwani, Chief Operating Officer, Embassy Group.

Naredco-Uttar Pradesh president R K Arora has handed over cheque of 10 lakh to district magistrate of Gautam Buddh Nagar for Covid-19 pandemic relief fund.

Gurugram-based M3M Group is providing relief materials to 5,000 daily wage workers till the lockdown.

"Tulip Infratech has taken the initiative and performing its Corporate Social Responsibility in terms of providing food, shelter, sanitation and medical facilities to all its site and maintenance workers," said Praveen Jain, CMD, Tulip Infratech.

Lodha Group has ensured food supply arrangements for tens of thousands of workers who are currently staying at their sites. The group is also ensuring medical welfare while the nation battles with the pandemic.

"In this situation of a national crisis each part of the society has to look beyond contractual obligations and deliver towards the betterment of society. The workmen may not be working during lockdown but their food and medical welfare is an essential requirement and Lodha Group is doing all it can to ensure that these needs are met," said a company spokesperson.

Godrej Group said has earmarked a fund of Rs 50 crore for community support and relief initiatives.

"This is an initial outlay and we hope to supplement it over time," the company said in a statement.

The company has ensured that its project sites across 8 cities are sanitised frequently, and have health screenings and adequate food and hygiene supplies. It has also set up isolation facilities at labour accommodation sites.

The Reserve Bank of India on March 27 asked banks, NBFCs and other lending institutions to allow a three-month moratorium on payment of installments on term loans, as the central bank came out with a raft of measures to alleviate the pain and disruption caused by coronavirus.

The deferment would not be classified as default and not impact the credit history of borrowers, it said.

The decision was cheered by experts who said it will act as a “sedative” for real estate developers and ameliorate the immediate pain by providing relief on loan repayments and working capital management while homebuyers will get a breather on servicing their loans.

“The moratorium of three months on EMIs on all outstanding loans (that) will ensure no impact on credit ratings on loan repayments” was a welcome move, said Niranjan Hiranandani, president, Assocham and Naredco.

The central bank also cut the repo rate by 75 bps to 4.4 percent, the lowest in at least 15 years. It allowed banks to defer interest payment on working capital loans until June 2020.

“All commercial banks (including regional rural banks, small finance banks and local area banks), co-operative banks, all-India Financial Institutions, and NBFCs (including housing finance companies and micro-finance institutions) (“lending institutions”) are being permitted to allow a moratorium of three months on payment of installments in respect of all term loans outstanding as on March 1, 2020,” the central bank said.

RBI Governor Shaktikanta Das said these were extraordinary circumstances and unprecedented measures were required to support the sagging economy.

Hiranandani said fresh liquidity of Rs 3.74 lakh crore had been injected into the system by unleashing arsenal support through strong fiscal measures.

“The reverse repo rate which has been cut by 90 basis point stands at 4 percent now. This should compel banks to lend more to all the adversely hit sectors,” he said.

It is a big relief for developers and homebuyers as well. Developers as of March 2020 owe banks, NBFCs and HFCs around Rs 4.5 lakh crore.

The moratorium would definitely benefit homebuyers as these financial institutions had lent around Rs 20 lakh crore as of March 2020, said Ramesh Nair, CEO & Country Head, JLL India.

“It is important for immediate transmission of these rate cuts to the homebuyers, which will boost consumer sentiment. State governments should also take necessary steps to utilise the cumulative Rs 31,000 crore funds for the welfare of building and construction workers to help those who are severely impacted by the economic disruption on the back of the lockdown,” he said.

Anckur Srivasttava of GenReal Advisers said the move would “act like a sedative and ameliorate the immediate pain by providing relief on loan repayments and working capital management for the real estate industry”. Most developers were struggling with cash flow issues and would now be able to focus on using their limited cash for taking care of their workforce and salaries, he said.

But, he said, the pain would only be relieved for the next couple of months. “The demand shock and oversupply issues still remain and as the recovery begins, a comprehensive package would be the next logical step,” he said.

Homebuyers EMIs may also be pushed by three months. “But it would depend on homebuyers if they would want to continue paying their EMIs for the next three months or defer them by three months as the interest for the three-month period would still accrue,” said Srivasttava. The loan would be extended by three-month period, he said.

"Developers now get breathing space to get their financial act together, at least for now. Moreover, the fact that non-payment of EMIs will not cause loans to turn bad is a major relief," said Anuj Puri, Chairman, ANAROCK Property Consultants.

The RBI’s announcements exceeded the industry’s expectations.

The central bank ticked all boxes of a rate cut, liquidity infusion and moratorium. These steps would help the economy to stay stable despite the lockdown and economic disruption, said Shishir Baijal, chairman and managing director, Knight Frank India.

Banks would have to sure a quick transmission of the rate cut or the whole effort would be futile, said Amit Modi, president-elect CREDAI Western UP and director ABA Corp. “We also welcome the three-month moratorium on EMIs as this would bring relief to millions of homebuyers across the nation," Modi said.

“We do hope the moratorium of three months on term loans announced by Governor, RBI, covers both interest and principal amount. In addition, RBI may consider providing additional capital for business continuity and payment of wages to real estate until the return of normalcy,’’ said Satish Magar, president, CREDAI National.

The moratorium would assuage fears of a downgrade of credit ratings and need to recognise NPA due to a potential non-payment of instalments, which would be a challenge in the face of the lockdown, Gaurav Karnik, National Leader, Real Estate, EY India, said.

“This three-month moratorium will help banks and financial institutions to keep their financial books healthy by avoiding a large onset of NPAs. For buyers, it would help ease the burden on their savings and prevent loan defaults,” said Sunil Mishra, CEO of Trespect.

Savills India CEO Anurag Mathur termed the announcements as radical and exemplary, saying the central bank had gone all out to revive growth and preserve the stability of the financial ecosystem.