In order to provide relief to the real estate industry, the government on Wednesday (May 13) extended the deadline for registration and completion of projects for six months. This comes as a relief to developers who are struggling due to the COVID-19 pandemic.
Finance Minister Nirmala Sitharaman said: “The Urban Development Ministry will advise the states and regulatory authorities to extend the registration and completion date for projects suo-moto by 6 months for all registered projects expiring on or after 25th March 2020.”
Homebuyer to bear the brunt
On one end, this comes as a respite to developers but the extension of the deadline for the completion of projects may also mean extra interest burden for homebuyers.
Ratan Chaudhary, Head of Home Loans, Paisabazaar.com said that “The extension of the RERA deadline for project completion by six months is most likely to increase the homebuyers’ wait for their property possession. This might adversely impact the homebuyer’s finances as they might have to pay their home loan EMI as well as the rent during the extended period. Home loan borrowers awaiting possession of their property should increase their emergency fund by including both 6 months of their rent and EMI in it. This will help them in continuing with their home loan EMI and rent payments in case of job loss, pay cuts, or other financial exigencies.”
The economic slowdown, which has been induced by the nationwide lockdown that has been imposed to curb the spread of the virus has lead to job losses and salary cuts across industries.
Currently, a lot of the homebuyers are struggling to pay their equated monthly installments (EMIs). The Reserve Bank of India (RBI) has allowed a moratorium of three months on term loans, including home loans, but that only allows deferment of payment of EMIs. There is no relief on the interest part.
In fact, the people who have opted for the moratorium, the interest burden for them will go up as the tenure of the loan will get extended.
(Source: Times Now News)