Realty stocks face selling pressure on RBI move
Mumbai: Realty stocks on Wednesday fell by up to 6.3 percent after RBI asked banks to link the disbursal of home loans to the stages of construction.
Shares of Sobha Developers plunged 6.24 percent to Rs 218.05 on the BSE.
Godrej Properties declined 3.39 percent to Rs 380.85, while Oberoi Realty was down 1.27 percent, Prestige Estates (0.87 percent) and DLF (0.71 percent).
Following the losses in these stocks, the BSE realty index ended the day at 1,151.03, down 4.72 percent and was the worst performer among the 13 sectoral indices.
"Real estate stocks were down on account of RBI's new home loan norms. RBI has asked lenders to stop innovative housing loan schemes, popularly known as 80:20 and 75:25 schemes," said Milan Bavishi, Head Research, Inventure Growth and Securities.
The Reserve Bank yesterday asked banks to link the disbursal of home loans to stages of construction to protect the interest of buyers and contain the fallout of "innovative" housing financing schemes.
"In view of the higher risks associated with such lump-sum disbursal of sanctioned housing loans and customer suitability issues, banks are advised that disbursal of housing loans sanctioned to individuals should be closely linked to the stages of construction of the housing project/ houses...," an RBI notification said yesterday.
Upfront disbursal "should not be made in cases of incomplete/under-construction/green field housing projects," it had said.
The notification follows the introduction of "innovative housing loan schemes" by some banks, in association with developers/builders, where upfront disbursal of housing loans is made to builders without being linked to the various stages of construction.
Also, under such schemes, the interest/EMI on the housing loan availed of by the individual borrower is serviced by the builder during the construction period. These loan products, the RBI said, are popularly known by names such as 80:20 and 75:25 schemes.
The RBI said such home loan products are likely to expose banks and their borrowers to additional risks.