Demand For Indian Homes Falls Blamed By Loan Rates

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.

According to a study by the Associated Chambers of Commerce and Industry of India (Assocham), housing demand in small towns witnessed a 25 percent fall during February-July 2008 period because of higher cost of borrowing. The report said realty transaction has gone down by nearly 25 percent in most of tier II and tier III cities between February and July 2008. Assocham Secretary General D.S. Rawat said:

“Approximately 15 million people in about 30-40 tier II and tier III cities were unable to make purchases as higher inflation and interest rate have dampened their enthusiasm and eroded their budget.”

The Assocham study is based on feedback from affiliated real estate majors like Parsvnath, Omaxe, DLF, Unitech, and BPTP, which are developing projects in small towns. Besides rising cost, non-availability of inputs such as bricks, cement and steel, and power shortage also cause inordinate delays in project completion.

The chamber has urged the government to introduce real estate investment trusts (REITs) to bring the much needed class of institutional investors to strongly support the domestic real estate market. According to the Assocham, REITs can also help develop commercial mortgage backed securities (CMBS) market and create a source of cheaper debt for commercial real estate.

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, 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.

Realtors, who are disappointed with this year’s budget, believe a cut in home loan rates is the only way to ramp up the demand for housing. High interest rates have drastically affected the growth of the sector. The growth is at 6 per cent compared with 30 per cent three years ago, when home loan rates were really low.”

Although average home loan rates at 7 per cent to 8 per cent were conducive for the growth of the sector, some economist predicts that it will not fall below 10.5 to 11 per cent. The rates vary from 9.5 to 12.5 per cent for loans up to Rs 20 lakh and 11 to 13.5 per cent for greater amounts. Real estate players are disappointed with finance minister P. Chidambaram for not renewing the income tax relief on the construction of affordable housing.

The benefit, which allowed builders to claim tax exemption on profits for making such small homes or flats, expired last year. Real estate players want the benefit to be revived to encourage middle and lower middle-class buyers of housing.

Real estate companies also complained that a hefty service tax on mall owners imposed in a previous budget had added to the higher pricing of flats. Analysts forecast that this service tax is ultimately a burden on end-users. It will add the extra expense incurred to the rentals. As a result, the cost of commercial space will become steeper and there will be fewer buyers.

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IMF Says India Economy Will Not Escape the Global Financial Crisis

Large domestic market will keep fuelling growth of the Indian economy, though at a

lower pace, despite financial crisis leaving the US and Europe reeling under recession, experts have said.

While the Reserve Bank and stock regulator SEBI have announced measures to improve liquidity in the system, the equity market has suffered painful bruises in India in sync with the global bourses.

But economists feel, the domestic market, which is much bigger than the exports, would save the day for the economy.
“The Indian domestic market is so big that if there is some pause in the global market, it will not affect the Indian corporates,” Secretary General of the FICCI Amit Mitra said.

He said, unlike other countries, India has a vast market and “a significant proportion of their (Indian industry) output is targeted for the domestic market,” he said. Though some industry surveys have shown erosion in the business confidence, over 35 per cent increase in the corporate tax during the April-September period of FY’09 shows a different picture.

Even the exports have shown an impressive performance in the April-August period rising by 35.1 per cent. An import appetite remains strong for a growing economy. Imports went up by 37.7 per cent in this period.

Principal Economist CRISIL D K Joshi said: “The domestic market is wide enough to sustain the US financial crisis.” However, he added, “We are buffered but not fully protected”.

The global turmoil would impact the Indian financial sector. ICRIER Director Rajeev Kumar said problems in the US and Europe would hurt the Indian economy but the impact has not been direct. He agreed that a ” wide Indian market will help sustain the growth to some extent”.

India’s economic growth rate may slip further and decline to 6.9 per cent in 2009, as countries in emerging Asia are not totally immune to the financial crisis in the US and its subsequent fallout, the International Monetary Fund (IMF) said today.

India’s Gross Domestic Product (GDP) is likely to slowdown to 7.9 per cent in 2008 and slide further to 6.9 per cent in the next year, said the IMF’s World Economic Outlook (WEO) released here ahead of the annual meetings of the IMF and the World Bank. According to the IMF data, India recorded a GDP growth of 9.8 per cent in 2006 and 9.3 per cent in 2007.

“In India, growth in the second quarter came down to about 8 per cent, on the back of weakening investment”, the report said, adding private consumption and export, however, continued to do well.

For Asia as a whole, the report said, economic growth rate was likely to slip to 7.7 per cent in 2008 and 7.1 per cent the next year in 2009.

The report further said that financial markets have weakened in recent months, driven by increasing concerns about the global outlook and declining investor risk appetite, particularly in the context of the September market turbulence.

Having experienced the largest run-up in prices in recent years during 2005/07, the report said, the stock markets including in India, have declined. In some countries, it added, borrowing spreads have risen markedly hurting those banks which rely heavily on funds from wholesale markets.

Popularity: 14% [?]

Abad Builders – World Class Builders With Top Class Properties

Article Author:
sukhpreet kaur

Abad Builders, a south India-based real estate company, they offer you a wide variety of homes that match your needs. Their projects are tastefully designed to suit requirements of buyers. Unlike other real estate developers who create hype, Abad Builders is quietly building a reputation for itself for creating quality residential landmarks. The projects are coming at places that are conveniently located and with the best prices.

About the Group:

Abad Group is one of the leading business concerns, which has established a strong presence in the business and industrial landscape of Kerala. The group has seven decades of experience decades of experience and is engaged in a diversified range of business activities that encompasses, construction activities (ABAD builders), seafood processing (ABAD seafood division) and hospitality services (ABAD group of hotels).

ABAD Seafood Division

The company a leading exporter of seafood’s from India and has won several national awards for stupendous export performance. It presently has eight factories that are EU approved & HACCP compliant with a combined freezing capacity of 250 MT per day & cold storage capacity of 8000 MT.

ABAD Group of hotels

The group also owns a chain of 8 Resorts and Hotels in Kerala asserting its colossal presence in the state’s Tourism and Hospitality Scenario.

Abad Builders’ Ebony Estate – Kochi

About the Project: The project is being built in the lap of greenery and is in harmony with the nature. It is conveniently located just about 900 meters away from Kizhakkambalam junction and is well connected to Ernakulam, Alwaye, Perumbavoor and Muvattupuzha. Ebony Estate will have two and three bedroom apartments. To make your living hassle-free and comfortable, the project will have a two level parking. Besides the basic amenities, the project will offer all deluxe and premium amenities.

Abad Builders’ Bluechip – Kochi

About the Project : Comprising of two elegant skyscrapers, Blue Chip apartments, offers 1, 2, and 3 bedroom premium apartments of areas 710/707sq.ft, 1118/1146 sq.ft and 1525 sq.ft respectively coming up in 17 floors. It is strategically located near to Info Park, Kakkanad, Kochi. The project promises to be a majestic land mark that will surely win admiration of all. The project is an amazing opportunity for housing as well as investment.

Abad Builders’ Chancellor – Kochi

About the Project : These premium apartments, comprising of two and three bedroom range from 1070 sq ft to 1620 sq ft. The project is coming up very near to Kakkanad, Kochi.

Abad Builders’ Green Terrace – Kakkand

About the Project: The fastest growing suburb of Kochi, Kakkand, is one of the most promising residential areas in the city. The area offers easy access to schools, hospitals and other commercial establishments; on the whole, the project offers the best of everything. The project is going to come up near the airport-seaport road and will offer a range of two and three bedroom apartments. The most attractive feature of the project is a fabulous terrace that offers a host of recreational facilities. With Green Terrace, smart living is turning a shade greener. It’s time for you to get draped in green.

Abad Builders’ Daffodil Gardens - Tripunithura, Cochin

About the Project: Tripunithura is the proud owner of an inherited royal legacy. Abad Builders, the first CRISIL rated builder from Kerala, is now crowning this palace town with Daffodil Gardens, the 21st project of the builder. The exclusive project offers just 39 premium apartments. Soon to come up in a very convenient location in Tripunithura with proximity all civic, educational and health support systems, Daffodil Gardens is slated to be one of the looked out residential projects in Tripunithura. Like all the common characteristics of Abad projects, Daffodil Gardens will also have a range of premium facilities and amenities. It’s time to take advantage of this special opportunity.

Abad Builders’ Aquarius – Aluva, Emakulam

About the Project: Abad Builders’ Aquarius Apartments is set on the banks of Periyar that promises a refreshingly splendid life. Aquarius offers two and three bedroom apartments with a charming view of the river. Though Aquarius is being developed under lush greenery, it is surprisingly close to the city and its comforts with direct access to the Main Road.

Abad Builders’ Nucleus – Maradu Kochi

About the Project: Abad Builders presents Nucleus, a grand mall located at Maradu in Kochi, just 1.5 km from the Kundannoor, N.H by-pass junction. The mall offers all that you want in shopping, business or any other need. The project is being designed to accommodate your diverse business needs. It offers a huge choice of shopping and office units with all modern amenities. Undoubtedly, the project will be the finest commercial centre in south with a total area of 1, 25,000 square feet of shopping mall and 45,000 square feet of office space. It will be a place to look out for as it will enable sells to successfully market products and services to a sizeable population of up-market customers.

Author
Sukhpreet Kaur Sawhney writes on behalf of Allcheckdeals.com , which is India′s first online brokerage for Abad Builders Developers. It provide services to customers starting from property selection by all real estate developers, site visit, booking, documentation, home-loan and after-sales service.

http://www.freearticledirectory.co.uk

Popularity: 16% [?]