It’s not auspicious time to buy new homes as approval rates2 min read
It is a unique and first-of-its-kind crisis in the world that we are facing due to Covid-19 pandemic. Every sector of Business is affected along with their employees and people who rely on them. Apart some businesses, Banks and NBFCs are facing the heat of the pandemic by RBI’s proposal to provide 6 month moratorium. The heat has been impacting real estate developers sitting with millions of home in inventory.
This has been a peculiar season of job losses and salary cuts, to say a unprecedented situation raised out of public health due to the Covid-19 pandemic. The builders are financially unstable in the situation due to down in sales and also increase in loan application to finance home buying. The banks attribute this to the employee downsizing by companies to match the situational demand and salary cuts that may be expected for at least till next year.
There are cases reported where banks are requesting for updated salary slips before approval to ensure their repayment capability in the near future. This situation has worsened the situation of builders and developers to hold on to the inventory. Though not publicly said, these are ongoing norms that are dictating the terms of home loan approval.