Tag Archives: housing industry

RBI Slightly Cut Rates, Developers Seek More

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RBI decided to cut the key policy rates by 0.25%. Welcoming the rate cut, realtors said that this will boost the sector.

Finally the Reserve Bank of India cut the key policy rates. While welcoming the decision of RBI, realtors said that it would boost the sector. RBI cut the repo rate (the rate at which banks borrow from the RBI) by a mere 0.25%.

RBI slightly cut the key rates.

RBI slightly cut the key rates.

Commenting on the rate cut, realtors said that the interest would have gone down if the reduction rate was further lowered. A further reduction would necessarily boost the home sales. Home loans will be lowered. This will boost the sentiments of the buyers.

Along with the buyers, the builders also will benefit from further rate cuts. If the repo rates are further revised, it will bring the EMIs down.

Speaking on the issue, former CREDAI chief Lalit Kumar Jain said that the common house buyers will benefit from the reduction of repo rate.

The Central Bank of India today cut the repo rate, short-term lending rate, by a mere 0.25%.  After the reduction now the repo rate stands at 7.25.

Developers seek more rate cuts from RBI.

Developers seek more rate cuts from RBI.

The RBI decision was met with mixed response. DLF, one the largest developers in India, said that the rate cut will hardly have any impact on the realty sector. The realty major said that the reduction is too small to leave an impact on the sector.

Rajeev Talwar, Executive Director of DLF Group, demanded further reduction. He opined that only a further reduction will boost both economy as well as realty. Mr. Talwar stated that the rate cut is very so small that it is insufficient to boost either economy or realty.

Sachin Sandhir of RICS (Royal Institution of Chartered Surveyors) also expressed a similar view. He too said only further rate cuts can boost realty sector.

Assotech MD Sanjeev Srivastva said that the move will boost the sector. He hopes that the rate cut by RBI will be passed on to the customers by the financial institutions.

Affordable Housing Policy for All

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In two months, India could have a brand new affordable housing policy, an effort to give some boost to a weakening real estate sector. The Union Ministry of Housing and Urban Poverty Alleviation (Mhupa) is in the process of finalising such a policy in two months.  The government had already allowed external commercial borrowing  for low cost houses in India in the annual Budget. But the real estate companies are not too keen on this segment because of the low margins. Hence the government is now trying to make affordable housing attractive for the developers as well.

The policy will raise the floor space index to compensate developers for high cost of land and also ease density norms, the Business Standard article says. It would give capital and interest subsidy to developers. Even government land would be auctioned on the basis of who could build maximum number of low cost houses.

Approvals would be given in six-eight weeks as against almost 70 approvals they require at present which typically take   between two to three years.

A recent example of such a case is the allegation by the Maharashtra Chamber of Housing Industry and the Confederation of Real Estate Developers’ Associations of India that plan to construct 500,000 affordable homes in Mumbai, Thane and Raigad districts of Maharashtra is gathering dust due to “inaction and policy paralysis” on the part of the state government. Such projects could be better executed with some sort of a single window clearance system.

On the other hand, the government is also making strict riders for the ECB borrowing so that money cannot be borrowed for low cost housing and transferred to other segments.  So the government could mention specific projects and developers that could access the ECB funds and also mention specific channels like National Housing Bank to borrow the funds.

Mumbai Builders Drop the Plan of Strike

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Mumbai builders have called off their strike scheduled for May 3.

The Maharashtra Chamber of Housing Industry and the Confederation of Real Estate Developers Association of India had called for a one-day token strike protesting the delay in project approvals and against the State Government’s move to establish a housing regulator.

The Builders Association of India too decided to participate in the strike. Addressing media persons here on Wednesday, Mr Paras Gundecha, President, said the Chief Minister, Mr Prithviraj Chavan, met the association on Tuesday and assured the members that all issues concerning builders would be addressed.

Mr Gundecha said MCHI also made a presentation to Mr Chavan on the issue faced by developers and sought a single window clearance for housing projects. The Chief Minister had also made it clear that the government’s priority was to build affordable housing stock, he said.

Growth of Indian Housing Sector

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House Industries Catalogue 54
The realty market in India is flourishing these days. Not just the domestic real estate developers but also the investors from all across the world; especially the NRIs are attracted to this Indian real estate market. If this continues, it is then expected that very soon the realty market will overtake the other industrial sectors in terms of contribution to GDP growth.

Currently, the major constituents of the Indian housing industry are the affordable houses which target especially the low income groups and economically weaker class. In the field of medium and luxury housing, in next few years, it is expected to see a remarkable growth since this segment has huge prospects for further developments. The hiring of expat employees by the MNCs and then providing them with luxury housing benefits is one of the reasons for the development of this sector. Also, the demand for luxury housing by NRIs is acting as a catalyst in the growth of this sector in India.

RNCOS presented a report called “Indian Housing Sector Analysis” in which it gave exhaustive information and objective analysis about the growth of Indian housing industry. The current and past market performance, market structure and factors critical to the success of the Indian housing industry are also covered in this report.

Based on the relation between the past market growth and growth in base drivers, such as government support, long-term interest rates, disposable personal income, household size, contribution by housing finance industry, GDP growth, growing industrialization and competitive structure, a forecast is been made in this report about the Indian realty market.

MCHI Showcasing in Indian Realty Expo 2010

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One of the most prominent bodies of realty developers and builders, Maharashtra Chamber of Housing Industry has planned to showcase the phenomenal work of Indian builders in the field of property in the 13th India Realty Expo 2010. This expo is scheduled from 3rd to 5th June, 2010 in Dubai, at the Renaissance Hotel, Deira. This step is taken by MCHI to bring some  of the NRIs in the Indian realty market.
is a member of CREDAI, Confederation of Real Estate Developers‘ Association of India. This expo will last as an opportunity to NRI investors to fully explore the offers and opportunities in front of them as far as Indian realty sector is concerned. This expo would throw light on all the fields, be it be housing, retail or commercial sector.
This ‘India Realty Expo’ will prove as a golden opportunity for the NRIs, especially in the Gulf region, to come back close to their motherland. Apart from CREDAI and MCHI, there will be 21 more builders who will participate in this expo. The expo will be held at from 5 pm to 9 pm on 3rd June whereas the timings for and June are 10 am to 1 pm and 4 pm to 9 pm. The main focus of this expo will be on the real estate sector of cities like Bangalore, Goa, Pune and Mumbai.