Government should restructure home loan rate

BANGALORE: With speculations about the Union Budget 2012-13 already doing the rounds, city’s real estate industry too has voiced its expectations. Mainly revolving around increased subsidy on interest rate for loans towards affordable housing and industry status for taxation and construction and relaxation of FDI up to 51 per cent into multi-branding, the industry is hopeful of a favourable budget.“The Indian real estate industry was riding through highs and lows in 2011. Last year, one per cent interest rate subsidy was offered for loans towards affordable housing. If the subsidy can be broadened, home buyers especially in mid and lower income groups will benefit,” said Sushil Mantri, president of CREDAI, Bangalore.“Indian real estate, especially housing needs the government’s support for further growth. The government should consider restructuring interest rates on home loans to attract larger base of lower and middle income group to benefit. For loan amounts lesser than Rs 25 lakh, the interest rate should be lower and should scale up as the loan amount goes higher,” said Sankey Prasad, chairman and MD of Synergy Property Developments Services.Amongst this, inflation is another main concern.“The real estate industry will be looking forward to RBI’s intervention to control inflation which has adversely affected the industry. If FDI is relaxed up to 51 per cent in multi-branding, this will boost the growth path for the Indian retail industry,” Sushil Mantri added.Claiming that the Land Acquisition, Rehabilitation and Resettlement Bill (LARR) is not ‘industry-friendly’, the Global Initiative for Restructuring Environment and Management (GIREM) demanded that the Bill be revisited.“With the Bill coming up for discussion in the Budget session in Parliament, we, in sync with the industry, are demanding that the draft be revisited,” said an official from GIREM.Experts further demanded that the glaring concerns of the real estate industry be addressed.“Low demand and liquidity remain the nemesis of the real estate industry. It is battered by repeated rate hikes which has resulted in fall in sales, higher cost of funds  and slowing of economy. These are the key concerns that need to be looked into,” said H R Girish, CEO of Vakil Housing Development Corporation Limited.