When the Modi government took over for the second time last year, the performance of the real estate segment was muted owing to the prevailing liquidity crunch, high inventory overhang, weak affordability and subdued demand conditions. However, interest rate cuts and focus on affordable housing, not to mention the creation of the Rs 25,000 crore stress asset fund for stalled projects, did propel the sector towards a road to recovery but the COVID-19 outbreak spoiled the party.
If the Modi government introduced several structural changes during its first term in office such as the implementation of RERA, GST, IBC, PMAY scheme for affordable housing, it focused on several liquidity boosting measures as it took over the office for the second time last year.
The Reserve Bank of India slashed repo rates by a total of 135 basis points in 2019 in order to boost economic growth and increase liquidity. Affordable housing remained upbeat in 2019 thanks to multiple government sops throughout the year. First-time homebuyers were given further tax deductions (now amounting to Rs 3.5 lakh in a year) on interest amount of home loans below Rs 45 lakh availed within FY 2020-end.Tag : business