Modi Govt Scheme: SWAMIH fund to help complete 12,000 flats annually in stalled projects for next 2-3 yrs

SBICAP Ventures, which is managing the government-backed Rs 25,000 crore stress fund for the realty sector, is targeting to complete and deliver 12,000 flats annually across many stalled projects over the next three years, a senior company official said on Friday.

In November 2020, the Centre had announced a Rs 25,000-crore fund, named Special Window for Affordable and Mid-Income Housing (SWAMIH), to help complete over 1,500 stalled housing projects comprising 4.58 lakh housing units across the country.

Addressing a FICCI summit on real estate, Irfan A Kazi, chief investment officer, SWAMIH Investment Fund, SBICAP Ventures Ltd, said it has sanctioned funding for 108 stuck projects so far, which will help complete around 63,000 homes.

The SWAMIH fund has sanctioned projects across 42 cities, he added.

Kazi said the target is to complete and hand over 12,000 homes annually over the next three years.

Replying to a query by Anarock Chairman Anuj Puri about what went wrong that led to projects getting stalled, Kazi equally blamed developers, homebuyers and lending agencies.

"It is very easy to say in retrospect. So the fault lines were all around. Real estate at the centre completely cracked as a result," he said.

"It was developer, it was homebuyers and it was lending agencies. All of them have contributed," Kazi said.

Highlighting the approach of SWAMIH fund, he noted that it is doing complete project financing and also ensuring that the expenditures are going directly into the project.

SWAMIH fund is taking care of all reimbursements after expenditures happen at project sites, he said, adding that this was not happening in the past.

Lack of regulations in the sector and developers' aggressive expansion plans also led to stalled projects.

"In so many cases, homebuyers became aggressive enough to destroy the very product that they were buying through litigations and concerted activism at the sites. Sometime that effort can be self defeating. We have seen happening as that well," Kazi said.

"It is culmination of all these factors that led to trouble in the past. We tried not to repeat those mistakes," he added.

Participating in the webinar, Brigade Enterprises CMD M R Jaishankar said the builders have no option but to pass on the increase in construction costs to homebuyers.

He said the buyers can absorb up to 10 per cent increase in housing prices in phased manner as their disposable incomes have increased during the COVID-19 pandemic because of rise in salaries and lesser expenditure.

Moreover, he said, the affordability has increased because of very low interest rates on home loans.

Jaishankar added that his company has hiked prices of apartments in some of its projects by 5-6 percent.