In a brainstorming session on ‘Opportunities and Challenges in Finance and Banking for Real Estate Sector’ on Wednesday, banking experts told real estate developers to realise their social responsibility of providing affordable housing to the masses.

Held under the aegis of the Gujarat Chamber of Commerce and Industry (GCCI) and Gujarat Institute of Housing and Estate Developers (GIHED) at Hotel Grand Bhagwati, stress was also laid on providing cost-effective housing for the low income groups, as this had remained largely unexplored.

According to GIHED vice-president Suresh Patel, a developer, this was because in the boom period of the last four years, majority of big players had worked towards meeting the needs of only top 12 per cent of the market. He felt affordable housing at lowest rate was possible.

He wondered how ‘board room analysis’ by bankers born in the 1980s could decide the fate of a 50-year-old sector. The good repayment figures shown by these bankers to prove their banking prowess could not be taken at face value because of limited exposure, he said.

Vijay Shah, a prominent real estate developer, lamented that banks were reluctant in extending project loans to developers. He said developers also felt difficulty in sourcing down payment of loans lately. Shah pointed out that banks had reduced valuation of assets for credit from 80 per cent to 60 per cent.

S Srinivasan, chief executive officer of Kotak Real Estate Fund, was optimistic about the real estate scene of Ahmedabad. He said it was much better than other cities like Mumbai and Bangalore. He said nowhere else was any developer able to offer a price of Rs 1,500 per square feet, but in Ahmedabad. He said if a buyer called a price of Rs 2,000 as unaffordable, it was a matter of mindset.

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