Nearly 500,000 homes worth Rs 4.48 lakh crore are stuck across seven metro markets in the country as on May-end, says an analysis by real estate consultancy Anarock. The National Capital Region (NCR) and Mumbai Metropolitan Region (MMR) together account for 77 percent of such projects. Pune had a nine percent share of delayed projects, and Kolkata five percent. The southern metros of Bengaluru, Chennai, and Hyderabad together accounted for the remaining nine percent.
Banks have steadily increased credit exposure to the commercial real estate segment over the years. For instance, banks’ credit exposure to commercial real estate stood at Rs 2.91 lakh crore in FY22, up from Rs 2.56 lakh crore in FY19 and Rs 2.35 lakh crore in FY17, according to data compiled by CRISIL Research.
Banks have increased exposure to the real estate sector largely due to the sanguine demand for both commercial and residential spaces, and market share gain from shadow lenders or non-banking finance companies.
Moreover, there are a few real estate players whose financial strength and sales have shown an uptick, and hence there is an increased propensity of banks to fund these projects.
However, some builders and realty firms continue to be financially strained, along with labour challenges and other constraints, which is reflected in their balance sheets. An unusually high number of stalled real estate projects across cities are becoming a cause of worry to lenders. Their exposure to stalled real estate projects could compound issues of bad debt in the long run.
