Banks Urge Developers to Reduce Property Prices

January 26, 2009	(1 votes, average: 5 out of 5)  Loading ...
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After the government, it is now the turn of banks and private equity funds to urge developers to reduce property prices. According to bankers, the demand is still there in the housing segment, but the soaring property prices are keeping customers away.

“Despite an industry bailout programme and the relaxation of lending rules, constructors are refusing to cut the inflated property prices,” said Deepak Parekh, chairman of mortgage lender Housing Development Finance Corp Ltd (HDFC). Parekh, also the chairman of a high-level task force on affordable housing set up by the ministry of housing and urban poverty alleviation, added: “There is nothing more incorrect than saying that people are not buying houses because of economic slowdown. The demand has not fallen, it’s the home prices that have not fallen enough.”

However, realtors said it was difficult to get funds for new projects as banks and private lenders were coming up with fresh conditions. “Apart from slackening demand and a liquidity crisis, banks and private lenders are now putting up new terms and conditions for funding,” said Rohtash Goel, chairman and managing director of real estate developer Omaxe Ltd. Major developers such as DLF, Unitech, Sobha, Omaxe, Parsvnath and Housing Development and Infrastructure have approached the banks to restructure their loans.

News Published Under:   Banking and Finance |

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