Bank lending to commercial real estate sees 12.2% growth, driven by unlisted developers taking a larger share, despite claims of credit shrinkage from listed firms.
In 2009-10, banks showed mixed responses to lending in real estate, with ICICI reducing lending while others increased, impacting residential and commercial sectors differently.
Finance Minister P Chidambaram assured real estate developers that the government will encourage banks to boost lending and lower interest rates for affordable housing.
Amidst lending reluctance from banks, real estate developers are turning to lease discounting for ongoing commercial projects, providing banks with guaranteed cash flow and a safer lending option.
A report reveals a staggering 400% increase in commercial property loan defaults over the past year, highlighting the struggles of smaller investors amid financial challenges.