Realtors hope good home sales during festive season on interest rate reduction

Posted By : Prerna Mishra

SME News, Friday, Oct 19, 2012 11:32:29 AM IST

Corporation Bank brings revision in home loans interest rates

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NEW DELHI: While Confederation of Real Estate Developers' Associations of India's (CREDAI) recent anticipation of 20 per cent improvement in housing sales during festive season has been hailed by the real estate developers across India, they still hope for additional reforms to boost industrial and commercial realty market.

Recently, CREDAI, the apex body for private real estate developers, has raised expectations that the considerable decline in interest rates on home loans, in the wake of ensuing festive season, may improve housing sales by 20 per cent in major Indian cities.

Some realtors are singing the same tune that the marginal fall in interest rate on home loans by banks will attract home buyers during the festive season, while others do not see much of buoyancy unfolding in the festive season.

Extending views on the same, Rajesh Khanna, owner & founder of Noida-based CornerStone Buildcom, said, “Financial lender's move of reducing interest rates on home loans during festive season will definitely woo home buyers and thereby encourage residential market of the city. But the struggling industrial and commercial market of the city also needs a boost.”

Talking more about Noida realty sector, he said, “Presently, New Okhla Industrial Development Authority (Noida) gives land to develop apartment projects only on leasehold. So, anyone who buys a flat in a residential or commercial project will actually own it only for 99 years and technically the authority remains the first owner. As per reports, the deliberations are underway to transform leasehold practice to freehold. If all goes as per plans, Noida realty market will shoot up.”

Giving different views, Raj Mehta of Goa-based Shree Ganesh Lands, said, “In my opinion lower interest rates on home loans will not bring much improvement in the sentiments of Goa property market as the land here is mainly used as investment option. Goa's property sector is mainly investors market.”

“Reduction in interest rates on home loans during festive season will definitely give a fillip to Haryana's real estate sector, but the early completion of much-delayed 135-km Kundli-Manesar-Palwal (KMP) Expressway will also give a fillip to state's realty sector, even after the festive season,” as expressed by Gajendra Nirwal, president of Sonipat-based Chaudhary Properties.

The Haryana and Delhi governments have set May 2013 as the fresh deadline for the completion of the project. On the contrary, KMP Expressways Ltd, the private concessionaire developing the expressway, claims that the 53-km priority stretch between Manesar and Palwal is scheduled to be completed by November 2012 and will be open to public by December.

Considering various factors ailing the sector since last two-three years, CREDAI has decided to take delay in getting environment clearance as priority issue as this takes maximum time compared with other approvals for real estate projects.

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