Wednesday, December 31, 2008

LIC Housing cuts lending rates by 75 bps

LIC Housing Finance on Wednesday announced a reduction of 75 basis points in interest rates for existing home loans with effect from 1 January.

The cut is on EMIs falling due on 1 January, 2009 and payable on 1 February, 2009, the company said in a statement.

The move was consequent with a reduction in cost of funds, it said.

For new customers, it had already slashed interest rates from 17 December. For loans up to Rs20 lakh and up to five years, the lending rates stand at 9.25%.

For loans up to Rs20 lakh and above five years, LIC Housing Finance has reduced lending rates to 9.75%.
livemint.com

Another brick in the wall, a difficult bet for realty

However, realty consultants are of the view that the recent measures taken by the government would bear fruit only if it is complemented with lowered property prices and further injection of liquidity.

Realising the impact of slowdown in the housing sector on other industries, like cement and steel, and its employment generation capacity, the government is mulling another package to boost the sector, expected to be announced in 2009.

Hopefully, the second stimulus package will bring smile to the common man and provide much-needed relief to the real estate sector.
To read more, please, visit - livemint.com

Related Stories:

1) Realty industry wakes up to reality: Bubble has burst

2) Home buyers can expect a better deal in the New Year

3) The real estate sector has to get real about the changed market environment, doing itself, consumers and the economy a favor

4) Affordable houses to rule the roost - Dileep Athavale

Now is the right time to work on reducing interest rates - K V Kamath, ICICI Bank

Existing and new ICICI Bank customers to get their new year gift in the form of a cut in interest rates

Forecasting that inflation is inching towards zero, ICICI Bank Managing Director and CEO K V Kamath on Tuesday suggested to the Reserve Bank to further cut key policy rates by 100 basis points as part of a calibrated move to usher in a low interest rate regime.

"I think just now let us start by cutting them (repo and reverse repo rates) by 1 per cent or so, and see what happens," he told when asked for what his advise would be for RBI to reverse the economic slowdown.

Kamath, who is also the President of the Confederation of Indian Industry, said, "It would be in everybody's interest to work interest rates down. Inflation clearly talked of being near zero. I think it is the right time to work on this front (reducing interest rates) now.

ICICI home loan interest rates:

As for the ICICI Bank customers, Kamath promised, they would get their new year gift in the form of a cut in interest rates.

"We are looking at cutting interest rates very early in January for our housing and other loan customers," he said.

The extent of the rate cut is being calibrated and would be announced soon, he said when asked if the rate could be more than 100 basis points.

ICICI had earlier this month reduced home loan rates for new customers by up to 1.5 per centage point. There are indications that the fresh cut in interest rates would benefit both existing and new customers.
To read more, please, visit - Cut key rates by 100 bps; usher in low-interest regime: Kamath

Related Stories:

1) India may see deflation 2009: Bankers

2) Another round of home loan package to make purchase of a house within the reach of middle class end users?

Confederation of Indian Industry -CII suggests measures to boost realty sector

The Confederation of Indian Industry (CII) has circulated a consultative note that stresses upon the need to give a major push to the country's real estate sector through primary and supplementary measures.

1) An extension of municipal limits of the existing cities,

2) Simplification of procedures for conversion of land use from agriculture to non-agriculture,

3) Offering infrastructure status to township projects,

4) A complete revision of the floor space index policy,

5) Allocation of specific land in the city master plans for economically weaker section of the community,

6) Government should consider either waiving off or substantially reducing the stamp duty for economically weaker section (EWS),

7) Promotion of appropriate low-cost housing technologies

Stimulate economy and generate employment:

With the phenomenal increase in population and urbanisation, the shortage of housing is expected to increase from 24.7 million dwelling units in 2007 to 26.5 dwelling units by 2011.

About 90 per cent of the shortage of housing is in this segment.

Any fillip to this segment of housing will spur economic activities, stimulate demand and generate employment, the CII note said.
To read more, please, visit - The Times of India

Property rates in the ready reckoner for Mahrashtra may drop

Indicative property rates, based on which Maharashtra levies its stamp duty in Mumbai and other key cities of the state, may fall marginally for the first time in about a decade as real estate transactions drop, according to sources in the revenue ministry.

The property rates in the ready reckoner for Mahrashtra may drop marginally reflecting the subdued sentiments, sources said. A final decision may be taken tomorrow.

The property ready reckoner is prepared by the office of the inspector general of registration and stamp duties (IGR) on the basis of transactions in real estate sector in respective areas.
To read more, please, visit - Makarand Gadgil-Business-Standard

Tuesday, December 30, 2008

Anti-terror mission - to top the agenda of Pune police in 2009

Links of various terror attacks traced to Pune

Kondhwa and Students Islamic Movement of India (SIMI):

The police have already swung into action and have prepared a detailed list of activists of the now-banned Students Islamic Movement of India (SIMI) operating in the city. The list has been submitted to the office of the state director general of police, the state home department, the Anti-Terrorism Squad (ATS), intelligence agencies and other police units.

Besides, vigil in sensitive areas like Kondhwa has also been stepped up.

Mission Mrityunjay:

Police commissioner Satyapal Singh also announced a plan to enlist the help of city college students in tackling crime, dubbed Mission Mrityunjay. As part of the initiative, the police expect to establish a strong network across all colleges in the city in 2009. This, they hope, will help them gather vital information not just pertaining to terrorism but all kinds of organised crime.

Closed-circuit cameras in strategic locations:

The police have submitted several proposals to the state government for demanding facilities like installation of closed-circuit cameras in strategic locations in Pune, sophisticated weapons, new lockups and more manpower and vehicles.

The police have asked for AK-47s, AK-59s and self-loading rifles. Besides, the police only have 25 bullet-proof jackets and an equal number of helmets.

Patrolling, nakabandi and new police stations:

"We have stepped up intelligence gathering, increased patrolling and have also launched massive nakabandi and combing operations. Seven new police stations were opened this year and we hope that our proposal for starting two more, which has been pending before the state government, will be approved in the upcoming year," the top police officer said.

Property owners - provide information of tenants:

The police also expect that the order asking property owners to provide detailed information of their tenants and the computerisation of the records of criminals will help speed up investigations in the forthcoming months.

Bomb detection and disposal squad:

An additional 50 policemen have been provided to the bomb detection and disposal squad for conducting checks and 200 more policemen have been provided to the traffic branch, Pune, for intensifying its drive against traffic violators.

"The year ahead seems tough for us, but we are prepared. We also need the state government's support and expect our pending proposals to be cleared in the new year," the senior officer said.
To read more, please, visit - The Times of India

Related Stories:

1) Kondhwa: Pune's emerging terror nest

2) City's first brush with terror in 1986

Although Pune's first major brush with terror was in 1986 when a group of Khalistani terrorists assassinated retired army general Arun Kumar Vaidya for his role in 'Operation Bluestar', it was the arrests of Anwar Alis and Javed Sheikh which have given a new insight into Pune's links with terrorism.

The chronology of major actions against terrorism in Pune so far:

3) Housing societies keep a close watch

Talegaon Dabhade residents up in arms against proposed six-lane expressway project to be initiated by the state public works department

The expressway:

The proposed 123-km expressway will link Talegaon on the Mumbai-Pune highway to Shirur, along the Pune-Ahmednagar highway and further up to Shikrapur, Nhavara and Chouphula, on the Pune-Solapur highway. In a way, it would be an easterly bypass for Pune and Pimpri-Chinchwad, as it would divert heavy traffic and thus help reduce traffic congestion.

The expressway is to be built at a cost of Rs 1,220 crore on a build operate and transfer (BOT) basis and involves the construction of four flyovers, five big bridges, 38 small bridges, 16 underground tunnels and 34 bus bays.

Through residential areas:

Residents have demanded that the expressway be diverted from residential areas to industrial areas.

Political groups as well as citizens organisations, have formed the Talegaon Action Committee in order to take their demands to the state government.

While residents are not against the expressway project per se, they have pointed out various reasons why the six-lane road should not pass through residential areas in Talegaon. An 8-km stretch of the proposed expressway, from Malwadi (on the Talegaon Chakan route) to Talegaon goes through a residential area, which has a number of housing colonies as well as schools, the committee said.

The committee has also pointed out that if the road alignment is changed, it would be easier to link it to the proposed international airport near Chakan.
To read more, please, visit - The Times of India:

Monday, December 29, 2008

ACC may shut more plants if demand fails to pick up

ACC, the country’s largest cement maker that had temporarily idled a plant in Himachal Pradesh this month, said it has kept all options open on similar shutdowns at its other locations in case there is no satisfactory demand for its products. The company, with a capacity to make 23 million tonnes of cement annually, has 15 plants across the country.

On December 16, ACC shut its 2.4-million tonne Gagal-II plant in Himachal Pradesh for a fortnight due to inventory pile-up at the unit. Last month, the company had laid off 25 per cent of employees at its wholly-owned subsidiary ACC Concrete.

Sumit Banerjee, managing director, ACC, told Business Standard, “The decision to shut our Himachal unit was the right one. If required, we will take such decision in our other plants also in the future if the demand is not satisfactory and our stocks pile up.”
To read more, please, visit - Business-Standard

Related Story:

Cement traders to give credit to real estate and infrastructure developers only in lieu of security

Realty industry wakes up to reality: Bubble has burst

Looking ahead, the industry does not foresee any upswing in fortunes in the immediate future, though the government and the central bank have been taking steps to infuse additional liquidity into the system, especially for sectors such as housing.

“This situation seems likely to persist for another 8-10 months at least. Most of the projects are getting delayed and buyers are not showing interest,” said Cushman and Wakefield’s Verma.

“Due to higher risks of investing in real estate, the real estate sector will witness lower private equity deals in the next 12 months,” warned a report by the Federation of Indian Chambers of Commerce and Industry (FICCI).

“As funds will not be easily accessible, valuations are expected to go down further and the costs are going to be very high for developers,” said FICCI, adding that existing projects were witnessing time and cost overrun, while new projects were being deferred.

“This would eventually lead to a reduction in price in the coming four quarters and the market is expected to turn in favour of the end users. Focus will shift to mid range and affordable housing with a considerable correction in prices of the existing residential projects up to 15 percent.
To read more, please, visit - ThaIndian

Related Stories:

1) Affordable houses to rule the roost - Dileep Athavale

2) Indian real estate is facing negative sentiment caused by the global economic meltdown - Kumar Gera

3) Home buyers can expect a better deal in the New Year

4) Realty, automobiles or IT, no escape from slowdown

Realty, automobiles or IT, no escape from slowdown

If there is one expression other than terror that can sum up 2008, it’s undoubtedly economic slowdown

At many sites, projects were discontinued and new launches deferred. While the stalemate continues, all hopes now lie on a potential marked reduction in the lending rates by financial institutions, being seen as the one step that may salvage the Pune real estate industry tottering at present.

A factor responsible in good measure for the scenario was changes in the booming IT industry. IT professionals, who had become a large chunk of buyers of houses in the past two years and also contributed to the unprecedented price rise thanks to their large disposable incomes, suddenly became a vulnerable section themselves. As IT firms faced the grim consequences of US slowdown and changing rupee to dollar ratio, the results manifested themselves in the form of salary cuts, stringent cost-cutting measures and even closures and pink slips.
To read more, please, visit - Express India

Related Story:

Affordable houses to rule the roost - Dileep Athavale

Saturday, December 27, 2008

Home buyers can expect a better deal in the New Year

The next tipping point would come when job confidence is restored along with all other factors and forces

If a developer does not sell at a particular price he will automatically come down

The year 2009 will lift the gloom in the real estate market as the property market turns buyer friendly with the cuts in property rates and home loan rates

Developers for their part would benefit as they will focus on creating volumes at affordable price points.

Wait and watch until property prices correct further:

“There is money in the market but people are waiting till January-February as they expect prices to correct further and more conducive policy announcements," say experts.

Gulam Zia, Director, National Advisory Services, Knight Frank expects the market will correct itself further by another 15 % and almost 30- 40 % from its peak. There will still be a wait and watch until all of that evens out, he says.

Smaller, value for money homes without compromising on the quality:

Developers point out that it would be a good bargain for buyers as most players would bring down their prices. Boman Irani, Chairman and MD, Rustomjee Group, says there will be more of smaller, value for money homes without compromising on the quality. “For instance , we are developing Rustomjee Urbania in Thane, a walk-to-work township with residences, schools, hospitals and convenience shopping.”

Stable property rates and maximum 10% appreciation:

2009 will also be the toughest year for developers as they will have to work on lower margins and not increase prices. If stock markets can fall from 20,000 to 10,000, developers too have to take a hit in their margins. It would be a phase of consolidation for developers and 2010 for most part will see prices remain stable and appreciate by maximum 10%, says Ram Yadav from Orbit Corporation.

Increase the incentives for home loans up to Rs 40 lakh:

"The government must come out aggressively to increase the incentives for loans up to Rs 40 lakh which would make it more meaningful in places like Mumbai besides further reduction in interest rates." says Pravin Doshi, Chairman, Acme Group and President, Maharashtra Chamber of Housing Industry (MCHI).

Sales depends upon:

The success of real estate projects or sales in 2009 would depend on: - how quickly developers align prices to the market,
- offer attractive financial packages,
- differentiate themselves in quality,
- demonstrate delivery or keep time lines.

Property buyers can demand transparency:

1) in area calculations,

2) in provision of amenities within the time line

3) insist on escrow accounts for under construction projects - says Balaji Rao, MD, Starwood Capital
To read more, please, visit - Padma Ramakrishnan - The Economic Times

Related Stories:

1) There’s no harm in creating a demand by lowering the property prices - Pujit Agarwal, M. D., Orbit Corporation

2) You can demand to reduce your property rate even after signing the agreement and paying loan installments!

3) Developers are likely to be forced to reduce prices further and offer higher discounts to clear existing inventory - BNP Paribas

4) Indian real estate is facing negative sentiment caused by the global economic meltdown - Kumar Gera

5) The real estate sector has to get real about the changed market environment, doing itself, consumers and the economy a favor

6) Affordable houses to rule the roost - Dileep Athavale

Pravasi Bharatiya Divas Convention, Chennai Trade Centre, Chennai, 7-9 January 2009 - preparations are in full swing

PBD-2009: Engaging the Diaspora – The way forward

1,500 delegates:

Being organised by the Ministry of Overseas Indian Affairs, Government of India in partnership with the Government of Tamil Nadu and the Confederation of Indian Industry, this biggest ever PIO/NRI event in Chennai is expected to draw over 1,500 delegates from different parts of the world.

Platform for NRIs/PIOs:

Ever since its inception in 2003, this annual convention has been the biggest platform for NRIs/PIOs to engage with the Government and people of India in matters of mutual interest and for networking. These Conventions enable the Government of India to better understand the expectations of the Overseas Indians from the land of their ancestors and to acknowledge their role in India’s all-round development. Discussions at these conventions have been very productive and fruitful for both the sides and have led the Government of India to take several measures to further strengthen the existing bonds of affinity and cultural linkage with the people of Indian origin.

Decisions:

Decisions taken by the Government of India as a result of wider consultations held at such Conventions include:
1) formulation of the Overseas Citizenship of India Scheme,
2) establishment of Overseas Indian Facilitation Centre,
3) conceptualisation of a PIO University,
4) formation of Prime Minister’s Global Advisory Council of People of Indian Origin, and
5) setting up of an India Development Foundation.

Programmes like Know India Programme and Scholarship Programme for Diaspora Children are designed specifically for Diaspora youth.

Theme and Sessions:

The theme of PBD-2009 is ‘Engaging the Diaspora – The way forward’.

There will be four plenary sessions entitled:
(i) “Indian as an Emerging Power: The Diaspora Factor”,
(ii) ‘Reflections on the Current Economic Crisis: Diaspora Concerns’,
(iii) ‘Preservation of Language and Culture of the Indian Diaspora’ and
(iv) “Diaspora Interaction with the States”.

Separate regional sessions on ‘Caribbean’ and ‘Canada’ would be the distinguishing features of the forthcoming convention apart from the regional sessions on ‘Africa’, ‘Asia-Pacific’, ‘Europe’, the ‘Gulf’ and the ‘USA’.

There would be Building Bridges sessions on:
‘Trade & Investment’,
‘Diaspora Philanthropy’,
‘Diaspora Knowledge Network’,
‘Media & Entertainment’,
‘Health for all: Role of Diaspora’, and
‘Increased Interaction with Diaspora women’.
There would be separate State sessions for the major participating states.

The Prime Minister, Dr. Manmohan Singh will inaugurate the PBD Convention on 8th January. The President of India, Smt. Pratibha Devisingh Patil will deliver the valedictory address on 9th January. She would also confer the Pravasi Bharatiya Samman Awards for 2009.

Apart from Dr. Kalaignar M. Karunanidhi, Chief Ministers of several other States are expected to attend; including Shri V. S. Achuthananthan and Shri Narendra Modi, Dr Y S Rajasekhar Reddy and Mr Bhupender Singh Hooda. A large number of Union Ministers would also be attending.

The Vice President of Surinam, Mr. Ramdien Saredjoe would be the Chief Guest. The Vice President of Mauritius, Mr. Angidi Chettiar, Ministers from Malaysia, Mauritius, Sri Lanka, Singapore, South Africa and Canada are among prominent PIOs who have confirmed their participation. Former Prime Minister of Fiji, Mr. Mahendra Chaudhury and former Minister Samy Vellu from Malaysia would also participate.

Prominent among the speakers to address the gathering include CK Prahalad, Sam Pitroda, Sugata Bose, Renu Khator, Shashi Tharoor, PT Usha, N. Ram, Lord Diljit Rana, Baroness Shreela Flather, Thomas Abraham, Gopinath Pillai, Rajinder Paul Loomba, TP Naidoo, Mahyendra Utchanah, Deepak Obhrai, Yusuffali, Professor Rajesh Chandra, Sat Pal Khattar, Hari Panday, Dr. Ravi Seethapathy, Sam Chandrasekar, Loganathan Naidoo, Meera Ravi, Justice Mohini Murugeshan, Professor Narana Sinai Coisoro, Mohammed Dewji, Dr. Alok Mukherjee, Professor M. K. Gautam, Albert R. Ramdin, Dr. Prem Misir, Dr. Philomina Ann Mohini Harris, Anand Ramlogan and Ashook Ramsaran.

A special Trade and Industry Exhibition with participation from Corporate, Financial Institutions, State Governments, NGOs and others will form part of the event. The Overseas Indian Facilitation Centre (OIFC) will set up a Market Place at the venue to facilitate business and investment. Art Exhibitions, Crafts Exposition and cultural programmes would also form part of the event.

The preparations and arrangements for the convention were reviewed by the Minister for Overseas Indian Affairs, Shri Vayalar Ravi, during his visit to Chennai on 26th December. He pointed out that the PBD-2009 has assumed greater significance in view of the global economic crisis that created a need for increased interaction between India and the ‘people of Indian origin’.

PBD Chennai is expected to carry forward the constructive engagement with the Diaspora with renewed vigour.

PIB Press Release

Related Stories:

1) Banking meltdown: India an opportunity for expats and NRIs

2) Investment opportunities for Non Resident Indian (NRI) in India

3) How are foreign exchange rates determined?

4) NRIs take advantage of the current situation of high exchange rates and interest rates - Venugopalan

5) Should i cancel my booking at Nanded City Pune?

6) Is this the right time for NRIs to book a flat at Amanora Park Town?

7) Did you know that DSK has acquired about 18 acres of land in New Jersey and construction of over one lakh sq ft is on?

8) Wait is over! Now you can become a world citizen! Paranjape Schemes', out of this world, Blue Ridge will be launched tomorrow!

10) Impact Senior Living Estates - upcoming housing for the elderly parents of NRIs near Golden Temple, Amritsar

11) Trust to implement NRI-funded social projects registered

12) Paranjape Schemes' Crystal Garden on Baner-Pashan Link Road and the beginning of a new world, Blue Ridge at Hinjewadi!

13) Lavasa - bookings for the 2nd phase to open in the coming festive season

Trust to implement NRI-funded social projects registered

The government has registered a non-profit trust, India Development Foundation (IDF), to enable non-resident Indians (NRIs) to fund socially relevant programmes in villages in the country.

“Presently NRIs cannot implement social, health, education improvement projects in a place of their choice in India without prior government sanction. With the setting up of a trust, they can route the money through IDF and implement the projects,” Vayalar Ravi, Minister of Overseas Indian Affairs, told reporters here Friday.

According to him, a group of NRIs can pool in resources and implement social, health, education and self-help group projects in rural areas.

The trust will fund non-governmental organizations(NGO) to implement NRI projects.
To read more, please, visit - Thaindian

Friday, December 26, 2008

Indian real estate is facing negative sentiment caused by the global economic meltdown - Kumar Gera

The chairman of Confederation of Real Estate Developer’s Associations of India (CREDAI), Kumar Gera believes that the industry would like to forget the year 2008 for reasons more than one, such as the global meltdown started through the sub-prime housing crisis and caused by financial hustling of unprecedented magnitude in the West.

In an interview with Praveen K Singh, he indicates that in the times to come the market will stay in line with the sentiment that emanates from the economic situation that we as a nation find ourselves in.Excerpts:

On the other hand, in most places, builders are holding on, they are sacrificing sales rather than reducing prices. What’s your prediction for the times to come?

This is incorrect. The real estate values across India have softened by varying degrees ranging from 5 to 25 per cent from the highs of 2007.

My prediction for 2009 is that the market will stay in line with the sentiment that emanates from the economic situation that we as a nation find ourselves in.

Indications are that as we see lower interest rates, reduced prices and government initiatives (stimulus) become available to the market the unfulfilled pent up needs of 2008 will result in home buyers translating their intentions to purchase into action in the year ahead.

While buyers are waiting in anticipation for the prices to fall, the investors are expecting higher returns to cater to the high risk factors which in the given scenario are too much to ask for.

But, when do you think, things will settle down?

Buyers realise that prices can soften only to the extent that input costs soften.

Major inputs in real estate are costs of land, construction-materials and labour, government clearances and approvals, finance costs, plus soft costs of design, marketing etc. To what extent have these come down and to what extent can they come down further is the crux of the issue.

Things will settle in the near future when buyers see that there are no further reduction possibilities on the input side.

Do you see a shift in focus to mid range and affordable housing with a considerable correction in prices of the existing residential projects?

Yes, the trend will be affordability at both ends - at the buyer and seller ends. Purchasers will be cautious to buy only what they can really afford and not what they expect to afford through future earnings.

Sellers (developers) will bring products in line with affordability linked to income levels of families in different market segments across India.
To read more, please, visit - ‘In sync with industry sentiments’

Related Stories:

1) Gera's Park View 1 at Kharadi - Happy Homes - Pre-Launch offer:

2) Affordable houses to rule the roost - Dileep Athavale

3) Pune builders will not see any cut in home prices
(Isn't it naive to ask a builder about reducing the property rate?)


4) Pune realty rates won't drop further - Promoters and Builders Association of Pune (PBAP)

5) You can demand to reduce your property rate even after signing the agreement and paying loan installments!

6) The real estate sector has to get real about the changed market environment, doing itself, consumers and the economy a favor

Another round of home loan package to make purchase of a house within the reach of middle class end users?

Concessional interest rate for home loans up to Rs 30 lakh?

Tax rebate on payment of interest up to Rs 2 lakh?

Cheap Home Loans:

It is felt that making funds cheaper for end users could play an important role in arresting the slowdown. Therefore , it is learnt the government is planning to increase the present ceiling of Rs 20 lakh for the concessional rate to Rs 30 lakh.

This will meet the requirements of a large number of homebuyers in the cities of National Capital Region, in Mumbai , Bangalore, Pune, Chennai and Hyderabad.

If the ceiling is raised to Rs 30 lakh, one can buy a house up to Rs 35 lakh with the cheap loan.

Tax rebate on payment of interest on home loan:

At present, an interest amount up to Rs 1.50 lakh paid on the home loan taken to buy a house for self-use is deducted from the taxable income. The ceiling is likely to be increased to Rs 2 lakh.

1.50 lakh: Net interest rate 7.75%

This will help reduce the cost of fund further.

At present, if one takes a loan of Rs 30 lakh at the concessional rate of 9.25%, the interest payment in the first year comes to around Rs 2,77,500.

Out of this, you can take a tax benefit on Rs 1.50 lakh only, which will be deducted from your income , enabling you to save a tax outgo of Rs 45,000.

Which means, net interest one pays in the first year is only Rs 2,32,500.

This brings down one's net interest rate on loan to 7.75% from 9.25%.

2 lakh: Net interest rate 7.25%

But, if the tax benefit is increased to Rs 2,00,000 from Rs 1,50,000, the net interest outgo will be reduced by Rs 60,000 to Rs 2,17,500 on a loan of Rs 30 lakh at 9.25%.

That means, the net interest rate on one's home loan comes to 7.25%.

6%!

If the interest rate on home loan comes down to 8%, the net effective interest rate will come down to 6% if the deduction against the interest amount paid on home loan is increased to Rs 2 lakh.
To read more, please, visit - The Economic Times

Related Stories:

1) Public sector banks cut home loan rates to prop up demand

2) Details of the incentives for home loan borrowers up to Rs 20 lakh likely to be made public today

3) Interest Rate for Home Loans should be around 5 - 7.5%!

4) HDFC cuts interest rate by 50 basis points for home loans of more than Rs. 20 lakh for both existing & new customers

5) SBI makes its home, auto loans cheaper

6) RBI slashes rates to shore up growth

7) Government unveils Rs 30,700-cr stimulus package

8) Politics of donations behind home loan plan

Builders Selling Small Number of Super Luxury Apartments are Fringe Players Nationally!

I dont understand what is the big deal in building fancy housing for 0.01% of Indian population. This satisfied the years of latent demand created for housing due to the job creation done mostly by IT offshoring industry. The recent push by the Government and incentives including classification of loans below 20 Lakhs as priority sector lending are very welcome. However, we need to understand that a house is a 'manufactured good'.

The Indian Real Estate Industry is 'Primitive' till the time we can mass produce at least 10 lakh of functional, decent homes per year that provide hygeinic living conditions and create decent neighborhoods. Let me illustrate this with an example -
To read more, please, visit - Frank Opinions of NRI

Thursday, December 25, 2008

Affordable houses to rule the roost - Dileep Athavale

(Means, in 2009, you will be happy to pay Rs. 2,000 per sq.ft. for a stripped down flat of 800 sq.ft., in a project which will not have any amenities and will be located somewhere on the periphery of Pune which will be low on infrastructure like roads, water, electricity or connectivity with the city and much lower on social infrastructure like educational institutions. Amen!)

Even as aspiring buyers of homes wait for property rates to fall further, the single most important factor that would dominate the realty scene in the city (Pune) in the New Year (2009) seems to be affordability.

Affordable flat means: stripped down smaller homes!

This subjective feeling of affordability may, however, find manifestation in the form of stripped down smaller homes, which would reduce the overall financial outgo of the buyer.

Affordable flat means: 800 sq ft @ Rs 2,000 per sq ft without lifestyle!

The real estate developers are unwilling to take a further hit in the selling prices of their products, though they have considered redesigning of the projects being built in phases.
(Do you think builder sell product? True, builders pretend to sell 'factory packed product'. But actually, real estate developers or builders are service providers. They offer service not a product. However, builders, thanks for taking trouble of redesigning!)
This essentially involves significant readjustments including reducing the area of houses from, say, 1,400 sq ft to 800 sq ft and cutting down on all the features which promised an enhanced lifestyle.
(Features - amenities do not enhance lifestyle, mostly only 'enhance' property rate and marketability of the project, what do you think?)
Another aspect of affordability would be to sell properties with a price tag of approximately Rs 2,000 per sq ft.
(Why Rs.2,000 per sq.ft.? Is it because builders can "afford" this property rate? Why not less?)

Affordable flat means: peripheral location without any infrastructure:

However, those connected with the industry feel that such housing is possible only at far away or peripheral locations which are low on infrastructure like roads, water, electricity or connectivity with the city and much lower on social infrastructure like educational institutions.

Who bothers about integrated townships (like Nanded City Pune)?

The much publicised township schemes have taken off, but will take a few years to create new stock, which will ease the demand pressure to some extent.
(Means builders can sell "stripped down smaller homes of 800 sq ft @ Rs 2,000 per sq ft without providing any lifestyle features at peripheral location which does not have any infrastructure!)

"We want Rates of 2005"!
(home loan interest rate and not property rate)

Lalitkumar Jain, president, Promoters and Builders Association, Pune (PBAP), said, "Cutting down the interest rates to the level of 7.5 per cent, which existed in 2005, and applying it to all loan amounts would be the only workable solution for now." Now that inflation has been arrested, such a cut is feasible, he added.

Interest-rate cuts failed!

The city's real estate market, as everywhere else in the country, stood tall for nearly four years, before suffering a setback as the demand for homes shrank drastically due to spiralling interest rates three months ago. The interest-rate reduction put in place by the state-owned banks, following directives from the finance minister, has not helped lift buyers' sentiment.

No property buyer in the market!

1) Real estate prices had touched unrealistically high levels and, now, despite the 10-30 per cent fall, there are no takers since the buoyant sentiment is gone," said real-estate advisor Niranjan Ghatpande.

"Projects which were selling at Rs 6,000 per sq ft are now unable to attract buyers at even Rs 4,000 per sq ft," he said, adding that in an economic situation like the one existing at present, people are unwilling to risk large exposure in terms of loans they take from financial institutions.

What perhaps corroborates Ghatpande's observation is that there is no significant movement in sales, in spite of real-estate brokers being offered brokerage at double the rate they got till six months ago from builders.

Moreover, freebie offers, such as luxury cars, have also not thrilled buyers.

Property rates to go down!

Industry observers said there may be a further decline in the realty prices over the next few months. According to Anuj Puri, chairman and country head of real-estate research and advisory firm Jones Lang Lasalle Meghraj, prices would come down as developers would find it increasingly difficult to hold the stock they are saddled with.

"Hold on than cut the property rates!"

Sunil Puranik of Nirmitee Developers, however, said the prices have come down to their lowest and no further fall could be expected. "We would rather hold on to the stock, than cutting the rates further."
(Yes, few can hold on. Let them. Go to his neighbor.)

Who needs affordable housing? Buyer or Builder?

"The slump in the realty market has brought centre stage the need for affordable housing, though we cannot hope to create it within the city limits," said Jain.

According to him, the city has a wide gap between availability and supply of housing. This, he said, has skyrocketed the land prices which is being reflected in the prices of homes. The slide in prices, according to Jain, is due to the redesigning of the units and cutting of frills.

"Until a couple of years ago, when the EMI for Rs 1 lakh was Rs 900, people were demanding three-bedroom apartments or row-houses. Now that the EMI per Rs 1 lakh in hovering around Rs 1,300, people do not mind a compact 800 sq ft two-bedroom house," he said.

Affordable housing, with rates ranging from Rs 1,500 to Rs 2,000 can be provided only in peripheral areas, but the government will have to ensure infrastructure there, said Jain. Since this is not possible in the near future, the only other aspect of affordability which needs to be considered is a further cut in the interest rates on home loans, he said. (!)

In 2009 property buyers may buy affordable homes!

Kumar Gera, chairman of the Confederation of Real Estate Developers' Associations (CREDAI), said there is a shift in the end products on offer and the term affordable' has taken on a high priority.

Both the developer and the buyer are attaching greater significance to affordability, he said. According to him, since the expected lower interest rates, reduced prices and a general stimulus to the economy as a result of government initiatives become available in the market, the unfulfilled pent-up needs of 2008 will result in home buyers translating their intentions into purchase decisions in the coming year.

The 2008 Story

-The year began with very high realty prices, making it impossible to buy a house for anything less than Rs 40 lakh anywhere in the city.

-In April, developers introduced a further hike of Rs 50-400 per sq. ft citing rise in costs of inputs, principally cement and steel.

-Three townships were announced between January and March under the Maharashtra Township Act, aiming to create additional housing stock of 6,000-8,000 units. Prices, however, hovered around Rs 3,500, indicating a high cost of acquisition.

-The global financial meltdown, that started in September and is still continuing, sent tremors through the realty market, stagnating sales and eventually sending the prices rolling down.

-In October, developers joined hands with lending institutions to share part of the interest burden with home buyers; the initiative failed to generate any significant response.

-Around November and December, high-end realty went on offer with attractive freebies, such as luxury sedans, but buyers were not amused.
Dileep Athavale - The Times of India

Wednesday, December 24, 2008

Dubai market at 'tipping point' as Real Estate Regulatory Authority warns against halting payments

Capitalising on this sentiment of uncertainty a number of groups have been messaging investors in Dubai's property sector via email and SMS, urging them to stop all payments for their units.

Dubai's Real Estate Regulatory Authority has responded by advising residents to ignore these messages, cautioning that stopping payments without verifying their contracts or seeking legal advice could result in the loss of their investment.
To read more, please, visit - ameinfo:

Real Estate Bank India (REBI), India’s largest network of property outlets, launches 'Property Guru' - property magazine

Real Estate Bank India (REBI), India’s largest network of property outlets with a global as well as a pan India presence, today launched “Property Guru” - India’s only comprehensive magazine for all realty requirements. Property Guru will be the only monthly magazine to offer a comprehensive approach to residential and commercial property and real estate in India. Property Guru will provide informative, objective, timely and relevant content on issues concerning residential, corporate real estate, facility management, architecture and design.

Sharing details about the magazine, Mr. Lakshmi Narayanan, President and CEO, REBI, said, “We are currently witnessing an interesting state of affairs in the Indian real estate industry. At REBI, we are fully geared to effectively address the property needs of customers and thereby set an upward swing in the real estate market. We have the expertise to offer all property–related services on a single platter. We believe this is the most opportune time to launch Property Guru as there is an inherent, fundamental necessity for a credible, comprehensive source of real estate information. We are also happy to launch our unique geo reference modeling services to further enable realty information seekers to enjoy enhanced convenience and service.”

Property Guru, through the print and online versions, will reach a large number of professionals from India and beyond, whose profiles include: end-user occupiers, developers, building owners, asset managers, real estate investors, architects, designers, facility and property managers, service providers and product suppliers. Property Guru will help develop a platform for information sharing amongst professionals and organizations and is all set to evolve into an important resource for decision-makers involved in the commercial, retail, hospitality, industrial, institutional and healthcare sectors. The magazine is well designed with ample pictorial content to ensure reader friendliness; the appearance of the magazine, paper quality and the size comes with an international and aesthetic appeal.

www.mypropertyguru.in, the online version of Property Guru will serve as an online community platform for interested parties to discuss various realty issues and information pertaining to best property deals, home d├ęcor, information on loans and a lot more.

MoneyControl

Indian real estate has pretty poor fundamentals...you are going to see much worse - Ajay Bagga, Chairman, Financial Planning Standards Board of India

There has to be significant price corrections:

On real estate, you are going to see much worse earnings de-growth happening. I would still be negative on the sector, despite rates going down.

The news of mortgage rates being brought down is one thing, but the demand pick up is not there and there has to be significant price corrections on the ground for a demand to pick up again.

Right now people are not even buying cars, so buying houses is out of question.

Watch Video

To read more, please, visit - MoneyControl

Cement traders to give credit to real estate and infrastructure developers only in lieu of security

Cement traders are looking at taking matters in their own hands. They want to put an end to cash-strapped developers failing to pay them on time.

Starting January 1, they will give credit to real estate and infrastructure developers only in lieu of security, which could be bank guarantees, letters of credit, or even asset-backed loans.

As the liquidity crunch deepens and these cash-strapped real estate developers are taking a long time to make those payments which are due, this is putting the cement companies in a fix because they don’t get credit as much as they provide.

What happens is the cement companies give them for cash and they have to wait for the payment to come up, which puts a lot of pressure on these traders. Now, the cement companies have eventually decided to set up certain norms and follow them rigidly.

Watch Video:

To read more, please, visit - MoneyControl

Impact of Global financial crisis - real estate to remain subdued: Mid-Year Review of Economy for 2008-09 tabled in Parliament

The global financial crisis may have moderate-to-large impact on India's manufacturing sector, while growth in the agriculture would be insulated from turmoil in the world economy, Mid-Year Review of Economy for 2008-09 tabled in Parliament said on Tuesday

The review said the recent global economic events may have "some impact on account of export slowdown and liquidity squeeze".

The real estate is likely to remain subdued, there may be increase in the non-performing assets in the banking and insurance sector, the review prepared by the Finance Ministry said.
To read more, please, visit - The Economic Times

Tuesday, December 23, 2008

Investor risk appetite in realty dry but high net worth individuals still active

High Net-worth Individuals' (HNI) money is still very much in the market and developers are not missing the cue

"There are transactions in Mumbai, Pune and many other markets where IT parks for example have been leased close to half million and million square feet – a cluster of 2-3 buildings or indeed standalone buildings which are being now sold as income generating assets to HNIs," says Sanjay Dutt, CEO, Jones Lang Lasalle Meghraj.

Rate of returns expected by the HNIs is as high as 18-20%. That’s a very steep jump from the 10-11% that they were expecting last year.

Watch Video

To read more, please visit - Priyanka Ghosh - MoneyControl

Monday, December 22, 2008

The real estate sector has to get real about the changed market environment, doing itself, consumers and the economy a favor

Real estate is one boom-gone-bust that's proving hard to tackle.

Realtors must accept that their big margin-driven boom-time is over for now. Much of their woes are their own doing. They overbuilt assets, riding on a bubble.

With depressed demand, they continued to expect unrealistic profit margins. And now they're resisting top-end price corrections.

Inflated asset prices are such that even the moneyed are sweating over purchases in tier-I and tier-II cities.

Shifting gear from luxury and high-end to mid-level and affordable housing is required.

Demand for low-cost housing is massively unmet; the potential for investment here goes beyond the context of today's economic downturn.

India's young demographic profile, rapid urbanization and high savings rate can keep propping up the property market.

But housing prices in some segments need to fall by as much as 30 per cent to match affordability.

The health of real estate has strong macroeconomic multiplier effects, both in terms of contribution to GDP and employment generation.

The more the sector is stimulated, the faster India's economic turnaround will be.

The real estate sector has to get real about the changed market environment, doing itself, consumers and the economy a favor.
To read more, please, visit - The Times of India

Sunday, December 21, 2008

Taj reopening ceremony was moving: Shobhaa De

Celebrity author Shobhaa De on Sunday said that the reopening ceremony of the Taj was one of the most moving functions she had ever attended.

'It was one of the most moving functions I have ever attended,' an emotion-choked De told reporters.

She was among the privileged few to attend the brief ceremony at the hotel.

She said that each of the 540 employees of the hotel were called individually and spoken words of appreciation by Ratan Tata, the Chairman of Indian Hotels, which runs the Taj chain of hotels.

'There was a thunderous applause during the whole event - the applause did not stop till the last employee took his/her bow,' De said."
To read more, please, visit - ibnlive

Real Estate developers unlikely to reduce prices, as they feel that their properties are rightly priced: industry body FICCI

According to FICCI's latest study on the "scenario of property prices in the country", developers may cut prices by 10-15 per cent and not beyond only if the situation does not improve in the next few months

The study underlined that developers seemed to have realized the need for affordable and mid-range housing to survive the current slowdown.

FICCI also said due to higher risks of investing in real estate, the sector would witness lower private equity deals in the next 12 months, as funds would not be easily accessible.

"...valuations are expected to go down further and the costs are going to be very high for developers," it added.

Regarding housing projects, FICCI said: "After having reached its peak, residential real estate in India will witness a steady down cycle for next few months. There is time and cost overrun in the existing projects while new projects are being deferred."

Such a situation would eventually lead to a reduction in price in the coming four quarters and the market was expected to turn in favor of end-users, the report said.

According to the industry body, high interest rates have dwindled the demand for properties, while scarcity of funds and slimming of liquidity have affected the supply side on commercial real estate.

"The corporates are postponing their expansion plans as they are expecting the prices to fall further. Instances of deferment in projects and delays in execution of ongoing projects are numerous," it said.

An increasing number of developers are now shifting their focus to demand based developments due to oversupply of commercial spaces, the report added.

Stating that many realty firms have diversified in the recent times to counter falling sales in the property market, FICCI said: "To beat the slowdown, some prominent companies are considering entering new areas like coal mining, big-ticket irrigation projects, transmission lines, telecom and core infrastructure projects."

On the PSU banks' recent reduction in interest rates, the report said that the upper limit of the special package for home loans should be increased to Rs 30 lakh from the current Rs 20 lakh.

FICCI has suggested measures, including simplification of land-holding framework, single-window approval for projects, use of technology to keep land records and release of more urban lands, for a healthy functioning of the realty sector.

In addition, the report has suggested allotment of higher floor space index (FSI) for integrated township projects to make properties more affordable.

To read more, please, visit - ZeeNews

"Thank you, dear customer"

Devendra Ksheer Sagar, the first customer at one of the restaurants, was just about to dip into pocket for his wallet when he noticed he hadn’t been billed. Instead there was a card saying: 'thank you for your support' and a bouquet of flowers.

'I was surprised when I got the card saying thank you for your support instead of the bill,' said Sagar.

'I had come here (Marine Drive) for my morning walk and since I knew the hotel was re-opening I decided to try a cup of tea,' he said.

'As soon as I stepped into the hotel, managers walked up to me and shook hands saying thank you. I was surprised on being told that I was their first customer. I was really touched by their gratitude.'

'We should be bold enough to deter and stop them (terrorists). Instead of getting scared, we should scare them with our resolve to fight back,' said Sagar.
Welcome to the Trident, terror has checked out

Impact Senior Living Estates - upcoming housing for the elderly parents of NRIs near Golden Temple, Amritsar


Medical help, security at the push of a button, a spa, a golf course and even spirituality.… Such safe and luxurious housing for the elderly is coming up, perhaps for the first time in India, targeting in particular the parents of NRIs.

The first such neighbourhood under the Impact Senior Living Estates (ISLE) will be established at Amritsar in the next two years, keeping in mind the predicament of NRIs who constantly worry about their aged or ailing kin back home.

Located close to the Golden Temple, the colony will mainly target Sikhs who would like to spend the last years of their lives close to a religious place.

Vinay Singhal, director of the project, said such housing projects were already there in Britain and Canada, but India was yet to explore such retirement options for the elderly.
To read more, please, visit - The Tribune

Related Stories:

1) Reverse Mortgage Loan scheme- by National Housing Bank

2) Forbes Magazine covers Athashri, Paranjape Schemes' initiative to provide a dignified and joyful life to India’s senior citizens

3) Because grandparents also want independence...freedom...to travel...to pursue hobbies

PCMC to announce the list of the eligible applicants for the housing scheme for the economically weaker section on January 15

Subhash Dumbre, acting commissioner and additional commissioner, Pimpri-Chinchwad Municipal Corporation (PCMC), assured a delegation of Maharashtra Navnirman Sena (MNS) party members about this on Thursday.

Earlier, the MNS conducted a 'Ghantanaad' (ringing the bell) agitation near the Babasaheb Ambedkar statue at Pimpri, after which a delegation, led by Raju Bhalerao, president, Pimpri division of the MNS, met Dumbre in the commissioner's office.

Bhalerao said thousands people have submitted their applications for the EWS housing scheme, but the PCMC has not announced the names of eligible applicants yet. He demanded that the PCMC returns the money deposited by the applicants with interest. Dumbre said the civic body will consider it if the demand came from the people themselves.

The MNS also demanded that the PCMC take action against the corporators who were alleged to have unauthorized constructions.
To read more, please, visit - The Times of India

MMRDA plan to construct rental flats, to replace slums in Mumbai, hits a realty wall

With the developers treading carefully during the ongoing slump in the realty market, the Mumbai Metropolitan Region Development Authority’s (MMRDA) plan to construct rental tenements to replace slums in the city is taking a “marginal” hit.

Target - 1 lakh rental flats by November-December 2009

3 proposals of 75,000 flats sanctioned:

1) Tiwri Village near the Western Express Highway at Vasai - 35,000 rental flats on 50 acre - Dhanashree Developers

2) Dombivali - 35,000 rental flats - Nirmal Group

3) Karjat - 6,000 rental flats - Tanaji Malusare City (TMC), MMRDA joint venture

MMRDA Rental Housing Scheme:

The project known as Rental Housing Scheme aims at providing transit accommodation to people until they find a permanent one.

You will get a 160 sq ft residential unit on a leave and licence basis for a period which will be decided by MMRDA.

Monthly charges - depends upon the location, residential unit, cost of construction, market conditions and other expenses.

Flats to MMRDA in lieu of commercial space and premiums:

The total FSI of 4, including 25 per cent FSI for commercial use and 75 per cent for residential use, is allowed as per regulations for the schemes.

The intending developers will construct and hand over the rental houses free of cost to the MMRDA in lieu of sale rights of commercial area and premium offered to it.

Real estate slowdown - worried developers:

The major worry of the developers is the sale of flats that are built on the remaining FSI. There is an overall slowdown in the market. It had an impact on some developers. Talking specifically about the Rental Housing scheme, the developers are worried if this trend would continue. In that case, the developers may find it difficult to sell the flats that they will construct in lieu of tenements.
To read more, please, visit - Express India

Related Story:

Pune Municipal Corporation to conduct a housing survey to review the housing issues in the city

SBI makes its home, auto loans cheaper

In a dose of relief to millions of existing and prospective borrowers, country's largest bank SBI today announced a 75-basis point cut in its prime lending rate which will make its home, auto and other loans cheaper.

Will be applicable to all existing and new floating rate loans

Will be effective from January 1

0.25-1 per cent reduction in its deposit rates across various maturities
To read more, please, visit - The Hindu

Saturday, December 20, 2008

Gera's Park View 1 at Kharadi - Happy Homes - Pre-Launch offer:

1 Bedroom Terrace Flats: Rs. 14.50 Lakh Onwards

2 Bedroom Terrace Flats: Rs. 23.16 Lakh Onwards

For details:

Sapna Kanakia : +91 90110 14700
E-Mail: sapna.kanakia@gera.in

Himanshu Jain : +91 93266 92540

Anurag Nigam : +91 93268 42218

Siddharth Sengupta : +91 99609 92894

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Eiffel Olympia - fully developed N. A. land near Hinjewadi, the global destination in Pune!

This safe, secure and recession proof investment proves that Kumar Properties and Avinash Bhosale Group's "Megapolis" is not an end of the world!

Please, remember "Helipad" is subject to approval from "concerned local department"!


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Sobha Carnation, near NIBM Kondhwa, launches special offer of 8% interest rate on home loan for their luxurious 3, 4 bhk flats and penthouses

Never before (!) "home loan interest rate subsidy offer" is only till December 31, '08


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Sigma One, Near MIT on Paud Road in Kothrud- Pune, to launch IV phase of only 15 flats on 9th Jan '09

You have to register yourself for the pre-launch offer because 2, 2.5, 3, 3.5 and 4 bhk condominiums are available on first come first serve basis!

Special Offer: Free tickets of "First Screening of Ghajini"


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Friday, December 19, 2008

HDFC cuts interest rate by 50 basis points for home loans of more than Rs. 20 lakh for both existing & new customers

Introduces a new slab for sub-Rs 20 lakh

Up to Rs 20 lakh - 10.25 %

Above Rs. 20 lakh - 11.25 %

New rates - effective from Monday

"The advantage of a cut in retail prime lending rates (RPLR) will accrue to all the existing floating rate customers over a period of next three months based on their respective reset dates," HDFC said in a statement.

ICICI Bank:

HDFC's closest competitor in home loans ICICI Bank had earlier in this month reduced interest rates by 150 basis points to 11.50 per cent for fresh loans of up to Rs 20 lakh.

Public Sector Banks:

Public sector banks have already capped the interest rates at 8.5 per cent for loans up to Rs 5 lakh to encourage low-income housing.

For middle-income loans of Rs 5-20 lakh, the PSU banks would charge a maximum of 9.25 per cent.

These rates would be reset only after five years.

PSU banks scheme is valid up to June 30, 2009.

No processing fee and no pre-payment charges for loans up to Rs 20 lakh.

Free life insurance cover to the home loan seekers as an add-on with the credit.

The housing major's decision to reduce rates comes within 24 hours of Home Minister P Chidambaram announcing in Parliament that the government will persuade banks to reduce loans for existing home loan borrowers as well.

ibnlive

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Reduction in home loan rate will not boost realty sector

Assotech CMD Sanjiv Srivastava said government is of the firm opinion that most of the loan seekers will be covered under the scheme. Finance secretary Arun Ramanathan has said that around 75% of the loan is of less than Rs 7.5 lakh. However, consultants say that most of these loans were taken before 2003, when the market was subdued.
The proposed scheme of government to make available lower home loan rate to end-users will remain a non starter. It will not help in reviving the sector, which is facing the worst downturn in the last 10 years, because of high interest rates. The small-ticket size of the loan that qualifies for the proposed low interest rate is the reason that will sink the proposed scheme.

Under the proposed scheme, government has asked banks to prepare a package to make home loan up to Rs 20 lakh available in the range of 7-8%. According to banking sources, the banks are planning to offer home loan up to Rs 5 lakh at around 7% and that of between Rs 5 lakh and Rs 20 lakh at around 8%. The present interest rate on home loan offered by public sector banks is around 10%.

But, the scheme is unlikely to benefit homebuyers in most cities in the country. This is mainly because there are hardly any apartments or houses available for up to Rs 25 lakh. Most of the properties available in the cities of National Capital Region, Mumbai, Chennai, Pune, Bangalore, Kolkata and Hyderabad are in the range of Rs 40 lakh to Rs 50 lakh.
To read more, please, visit - The Economic Times

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Banks must reset the interest rates for past borrowers - Union Home Minister P Chidambaram (ex-finance minister)

Even floating rates must come down!

Relief for Old Home Loan Borrowers:

The Union Government on Thursday said that it would continue to push for cheaper home loans even for the existing borrowers. Speaking in the Lok Sabha Union Home Minister P Chidambaram, who earlier held the finance portfolio, said the government has asked banks to cut interest rates on home loans.

Chidambaram's statement assumes importance as public sector banks on Monday said interest rate for fresh home loans of up to Rs 5 lakh will not exceed 8.5 per cent, while the lending rate is a maximum of 9.25 per cent for new housing loans in the bracket of Rs 5 lakh and Rs 20 lakh.

However, the existing borrowers did not get such relief.
"We are talking to the bankers. As the PLR is refixed, they must lend even to the past borrowers and reset the loans rates for past borrowers also. As the PLR is brought down even floating rates must come down," he said in reply to a debate in on review of the economic situation in the country.
Chidambaram said housing is an important sector and a major driver of the economy.

"Steel, cement, bricks, pipes, wires, electrical equipment, construction, labour everything depends on housing," he added.
To read more, please, visit - Govt asks banks to cut home loan rates, again

Related Stories:

1) Public sector banks cut home loan rates to prop up demand

2) Bargain, get a cheap home loan from banks

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