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Developers expecting Home Loan rates to fall
| October 14, 2008 |  (Be the first to rate this story!) Loading ... |
As home loan rates soared from an average of 7 per cent to as high as 12-13 per cent., demand for real estate property decreased by nearly 25-30 per cent in the country over the last 18 months after the cut in Cash Reserve Ratio by the RBI, the developers are expecting the home loan rates to fall. “The home loan rate in India is among the highest in the world and we expect it to be reduced by at least 100 basis points after the cut in CRR,” said Mr Pradip Kumar Chopra, Chairman, PS Group. Mr Abhijit Das, Regional Executive Director, JLL Meghraj, said, “The recent move by RBI is expected to enhance liquidity to the primary and secondary real estate funding, while arresting further de-growth in real estate investments in the country.”
While banks had been reducing disbursements to the real estate sector over the last one and half years, the loans extended to “risky” projects dried up after banks fell short of liquidity, following the global financial crisis, said Mr Sujit Kanoria, Managing Director, Shristi Infrastructure Development Corporation. “We have temporarily suspended loan disbursements towards real estate projects,” said an official at the United Bank of India on condition of anonymity. The bank’s total loan outstanding with different real estate projects was Rs 2,500 crore as on March 31, he said.
“Our exposure to bank loans is only 5 to 15 per cent, making us less vulnerable to a liquidity crunch,” said Mr Sushil Mohta, Director, South City and Merlin Projects. Mr Pradeep Sureka, President, Confederation of Real Estate Developers Association of India and Managing Director, Sureka Group, said, “Banks are funding real estate sector with caution only after a project is sanctioned and construction has started. Time will say whether the cut in CRR will have any positive impact on the sector.”
News Published Under: Real Estate India, Home Loans |
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