The Hindu Business Line : Home buyers worry about job security

Mumbai, Nov. 24 Property buyers appear to be more concerned about job security in the current economic scenario rather than high home loan rates or prices of properties.

It is definitely on top of their mind, said Mr Sunil Mantri, Chairman, Sunil Mantri Realty. Mr Mantri said that in the last three months, at least 10 buyers had reverted to him, informing him of either loss of employment or salary cuts. Some were from the aviation and finance sector, though a majority complained of sharp cuts in their pay packets, he said.

Mantri Realty has attempted to help out by arranging for resale or leasing out the property so that its customers can service their loans through rental income without default. “We waive transfer fees and try to help them as much as we can,” he said. For those who had taken a 10-20 per cent cut in salaries, they invariably approach banks that have lent them for assistance, he said.

Mr Manish Grover, Vice-President (Marketing), Mantri Realty, said buyers had become extremely cautious and recounted some of them discussing what they would do in case of salary cut or job loss.

A BPO executive, who recently purchased an apartment in the city suburb of Kandivili for Rs 50 lakh, is on the lookout for a bailout as his wife, an IT professional, had just lost her job and the private bank he had borrowed from is unwilling to reschedule the loan and reduce interest, which is 12 per cent.

Fear psychosis

Mr R.S. Ajmera, President, Confederation of Real Estate Developers’ Association of India (CREDAI), feels that the overall slowdown and the frequency with which layoffs and job losses were making headlines today had created a fear psychosis in the minds of people. A sentiment change was need of the hour, he said.

Admitting that strong measures were required to spur demand in real estate, he said CREDAI has asked the Government to bring home loan rates in the range of seven to eight per cent, accord total exemption on the interest component for Income Tax purposes for first-time home buyers and ensure banks did not seek more than 10-15 per cent of margin money for home loans.

While demand has slowed down considerably, home finance companies and banks insisting on 25-30 per cent margin money were proving to be a dampener, he said.

On CREDAI members lowering prices, he said almost all developers were offering a discount and the association had only advised them to extend whatever more possible.

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