Navi Mumbai, India (PressExposure) July 13, 2011 -- Real Estate Developers are scouting for innovative financing options other than giving discounts to buyers to arrange cash for project completion. The buyer activity in the real estate market is witnessing clear-cut drop following the increase in real estate prices and interest rates for buyers as well as lack of project finance available from banks.
"Couple of Real Estate developers were looking for amount upto Rs. 3 crores to complete their projects and give possession to the owners. We as consultants referred them a banking product that offered them amount up to 1.5 times of valuation of their luxury cars. They were happy choose the option and utilize the cash into project completion." said Mr. Anil yadav, Head Relationship manager for Netz Capital Advisors, a firm that consults businesses on referring to best available banking products.
"We offered upto 25% fo discounts to the buyers on one of our project, but it was still difficult to raise cash. Hence we went ahead with a banking product like this to atleast complete construction and giving possession to existing owners." said Mr. Jignesh Soda, a real estate developer in the city.
"Not all projects are facing the cash crunch. It is only the extra premium projects with extra large areas and amenities that are finding it difficult to find buyers. Genuine projects and developers have takers as well as banks to back them up. Even good hospitality projects are able to raise essential capital." said Mr. Neil Mathew, senior level consultant for Netz Capital Advisors.
"Current price range in the real estate market is due for correction and many developers will have to need new financing options to complete projects since customers are not even buying stock at discounted prices." said Mr. Ashutosh Padhye who recently purchased a flat in Mumbai.