Business Today
Demand Gap To Be Bridged

Following the NBFC crisis, liquidity has dried up for project finance, and only top developers are now able to raise fresh funds

Demand Gap To Be Bridged

New housing launches have declined 11 per cent in the first half of 2019 as liquidity squeeze has hurt the ability of developers to put fresh projects in the market. Following the NBFC crisis, liquidity has dried up for project finance, and only top developers are now able to raise fresh funds. Alongside, subdued consumer interest has led to a decline in customer advances, which is a substantial source of funding for developers.

A total of 73,049 projects were launched in the top seven cities compared to 82,300 projects in the year-ago period, according to data from JLL. However, this decline in new launches is expected to work well for the sector in the long term as it will help clear the unsold inventory. It will take about 40 months for the current housing stock to be sold. Lack of new launches, therefore, will help balance the demand-supply mismatch in the sector.

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