MMR realty stands at $8.7 billion under loan severe stress, that is 25% of the total loan advances.

About $8.7 billion, which constitutes 25%, is under severe strain at the moment from the sum of $35 billion loan advances offered to developers within the Mumbai Metropolitan Region (MMR). The ANAROCK property consultancy study showed that this is around twice the total loan stress in the National Capital Region (NCR) of $4.3 billion.

The NCR real estate sector has, up to now, received $23 billion worth of total loans from Banks, NBFCs and housing finance companies (HFCs).

In terms of current stressed loans, the property market in Bengaluru stands apart. Of the overall $16 billion real estate loans in the city, only 1% or $160 million are in the category of ‘red alert’. This is because the city’s developers are better financially disciplined; lower demand and supply disparities and price range of the property to ensure gradual rather than haphazard growth.

In the 2 biggest real-estate markets of the nation – MMR and NCR – the liquidity crunch is ruthless. Both markets currently have $13 billion in loans under severe stress, and the lenders are facing extremely poor chances for recovery. This is attributed to the earlier dependency of many developers on high leverage and the allocation of fund diversions. The ANAROCK report added that property sales in recent years have been volatile and have contributed to dwindling cash reserves.