What Real Estate Gains?

§                                          Real estate was starving of liquidity and these major changes can help breathe a sigh of relief.  Cash trapped developers are in dire need of funds to complete projects. With the repo rate increasing from 7.75% to 8.00% and reverse repo from 6.75% to 7.00% in 2014, developers had a hard time to raise funds from banks and financial institutions. These relaxations will bring in liquidity in the sector as they can find institutional funds as savior.

§                                     With FDI being allowed to enter into projects less 50,000 sq. mt., small to medium sized developers can have access to foreign institutional funds which will empower the real sector to grow holistically.

§                                         Inexpensive housing projects have long been suffering due to insufficient attention. With relaxations in FDI, more funds will inflow in Indian real estate market which is expected to boost the inexpensive housing projects. Since, these projects cater to the economically weaker segment and low income groups, the changes in rules is expected to be a game changer for the economically low end segment and improve basic infrastructure.