The Hindu Business Line : Home loan package: Most realtors disappointed

New Delhi, Dec. 15 The home loan package announced by public sector banks on Monday left the real estate industry a tad disappointed, as most realtors had expected steeper interest rate cuts.

“The disappointing part is the rate of interest. We were expecting much higher cut in the rate of interest. For Rs 5 lakh loans, we were expecting 6 per cent rate, and between Rs 5 lakh and Rs 20 lakh we were expecting 7.5 per cent rate,” Parasvnath Developers Chairman, Mr Pradeep Jain, said.

Mr Jain also reiterated the industry’s demand that the bracket for assistance should be extended to loans that were over Rs 20 lakh.

“In order provide assistance to the priority sector and to boost demand in the metros and Tier 1 towns, the banks should have extended the Rs 5- 20 lakh bracket up to at least Rs 35 lakh,” he said.

According to Mr Rohtas Goel, Chairman of NAREDCO and CMD of Omaxe Ltd, the industry had expected more sops from banks to revive up the housing sector.

“We strongly support the upper limit to be raised to Rs 30 lakh against existing Rs 20 lakh and this indeed will attract more buyers to come forward to invest in the sector.

“Most of the home loans fall in the range of Rs 20-50 lakh and hence the relief package should have looked at providing benefits to this segment of borrower to give a push to the realty,” Mr Goel said.

He said NAREDCO had expected a lower interest rates for loans up to 50 lakh (to 9 per cent), up to 30 lakh (to 7.5 per cent) and upto 5 lakh (to 6 per cent).

Mr Sanjay Chandra, Managing Director, Unitech Ltd, welcomed the Government’s move to make home loans cheaper for the lower segment of the market.

The public sector banks on Monday lowered the interest rates they charge on some home loans, taking cues from the Government and RBI’s efforts to stimulate the economy.

Interest rates would not exceed 8.5 per cent a year on home loans up to Rs 5 lakh, and 9.25 per cent on loans between Rs 5 lakh and Rs 20 lakh.

The rates on these loans now vary between 10 per cent and 12 per cent.

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