RBI Slightly Cut Rates, Developers Seek More

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.

Real Estate Developers Oppose ULCA in Bengal

CREDAI urged the Bengal government to repeal urban land ceiling act. The apex body of real estate developers said that this has become a serious issue which blocks the real estate constructions.

Real estate developers’ confederation – CREDAI harshly blamed the Mamata Banerjee government to implement Urban Land (Ceiling and Regulation) Act (ULCA) in Bengal. The apex real estate developers’ confederation pointed out that Bengal is one of the few Indian states to have ULCA. Continue reading

CREDAI Finally Says “No” to Real Estate Corruption

 

credai anti corruption

Anti Corruption Campaign By CREDAI.

CREDAI– Confederation of Real Estate Developers Association of India has asked the members not to bribe officials as part of their anti-corruption policy. This warning is resulted from the hurt feeling caused by the growing allegations on real estate corruption. Continue reading

Pune Project got Investment of $13M from Infinite India Real Estate Fund

JM Financial group promoted Infinite India Investment Management has invested $13 million through its realty fund Infinite India Real Estate Fund in Pune-based developer Kumar Urban Development Ltd’s (KUL) residential project, said sources close to the development.

The source privy to the development said the transaction has been inked recently for an equity stake in a high end residential project which would have developable area of 1million sqft in Pune. The exact size of the stake sale could not be ascertained. Infinite India Investment Management declined to comment on the transaction. When contacted by VCCircle, KUL chairman Lalit Kumar Jain confirmed that the firm has raised capital but did not immediately share name of the investor or the deal amount.

At present KUL have 12 on going residential projects in Pune, five in Mumbai and one in Panchgani, all in Maharashtra. Two years ago KUL was looking to raise Rs 450 crore through an initial public offering (IPO) which didn’t materialise. Half of the amount was to be used to repay high cost debt taken from Standard Chartered and ICICI Bank among others at an average debt cost of 15 per cent. It then came up with the plan to raise private equity funding for its projects and last year managed to rise close to $65 million for some of the projects.

 

Infinite India Investment Management had first launched the realty fund as an equal equity joint venture with SRS Fund and it had plans to invest $400million. JM Financial bought out the JV partner’s stake in April 2010 and since then it has been investing on its own.

Some of its previous deals include $6 million investment in a residential development project of Windshield Developers in Pune besides its agreement with PVR for buying out the multiplex chain’s property located in Phoenix Mills in Lower Parel, Mumbai for Rs 100 crore in May 2011.

 

Builders say that Pranab Mukherjee has ignored ground realty in the Union Budget 2012-13.

With predicting an escalation in property prices, top players in the realty sector said they had been ignored by the finance minister.

Chief of the Confederation of Real Estate Developers’ Association of India (CREDAI), Lalit Kumar Jain, said the announcement on external commercial borrowings (ECB) for affordable housing was a minor respite but still meaningless. Jain, who is also chairman and managing director of Kumar Urban Development Ltd, added, “We contribute 6.5% to the GDP and expected a big boost from the budget for affordable housing through special schemes, an interest subvention of 5-7 % for LIG (low income group) and EWS (economically weaker section) housing and promotion of rental housing through tax exemption.”

Jain also pointed out that the interest subsidy on home loans was too low. The Budget has extended the scheme of interest subvention of 1% on housing loan up to Rs 15 lakh where the cost of the house does not exceed Rs 25 lakh for another year.

In addition, Gaurav Gupta, director, Omkar Realtors & Developers, lamented that the realty sector had got nothing to boost market and customer sentiments. “There are no indications of this sector being granted the status of an industry, which it much deserves. On the contrary, the increase in service tax will push up realty prices as the additional cost will be passed on to the buyers.”

Tata Housing MD and CEO Brotin Banerjee added, “Initiatives to make affordable housing available to a larger section of the society have only been met partially.”

There were some who welcomed the proposals. Sachin Sandhir, MD, RICS South Asia felt it “exceeded expectations” given the pressures on the fiscal situation.