Interest Revisions on the Horizon:
The Deputy Chief Minister of Maharashtra described the current interest rate levied by MHADA on developers as truly high and stated the need to lower it and make it at par with Brihanmumbai Municipal Corporation (BMC). The Chief Minister stated that the interest rate should be reviewed, and a considerable reduction should be made to make it at par with the interest charged by BMC.
Charging developers an 18% interest rate by MHADA appears to be an unjust practice, raising concerns within the real estate community. Such a high-interest rate can significantly impact the financial viability of development projects, hindering the growth of real estate sector. Developers, already grappling with various challenges, find this steep interest burden an additional hurdle. This policy might inadvertently discourage potential projects and limit the scope for affordable housing initiatives. Striking a balance between the financial sustainability of developers and the mission of providing affordable housing is crucial for fostering a healthy real estate environment. Re-evaluation and discussions surrounding the interest rates could be pivotal in ensuring a fair and sustainable partnership between MHADA and developers, ultimately benefiting the broader community and the real estate sector as whole.
Regarding the industry’s plea for a reduction in premiums, Mr. Fadnavis affirmed that the government consistently considers this matter. However, specifying the exact timeline for implementation remains challenging. He added that the government is actively engaging in discussions on various demands put forth by the real estate sector.
The Deputy CM also stated that, “After Maharashtra has started MahaRERA, the entire real estate industry has been transformed and the faith of small buyers in the industry has increased a lot. The developers following the MahaRERA rules have created a genuine market for the buyers and created a level-playing field. Many players from the corporate and non-corporate world are entering in the sector with ethical values.
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