Motilal Oswal says more measures likely for affordable housing

“If you see the direction, which the government is taking or the policy action that is happening, it is all around affordable housing. They have been very consistent over a period of the last six years of bringing in various measures to boost affordable housing. So I would say, luxury or Delhi or Bombay kind of a market would have some more time to come back with some positive news but I would focus on affordable housing as a big theme and I believe there will be more sops that can come in over a period of time,” he said.

According to him tight liquidity, lack of demand and high inventory are the three challenges for the real estate sector.

“I would say the bigger risk is a liquidity logjam. There is absolute liquidity freeze for real estate developers for the last one year. Given that the non-banking financial companies (NBFCs) crisis continues to be there, I would say that is one big risk that the government needs to address,” said Mittal, adding that one-time restructuring window can be a solution to overcome this issue.

Speaking about debt-unwinding, he said, “The debt unwinding in this sector will take anything between three and five years. The way we are going, it would lead to consolidation. These large developers will be eventually net beneficiary of the crisis that we are facing but before we reach that point, the unwinding will take a toll on the entire sector and we will have to go through that pain over a period of next couple of years.”